A picture taken on December 12, 2018 shows files containing the paperwork of AUB’s Motor & Diesel Centre, owned by Mr Aubrey Mulaudzi, 56, a diesel mechanic who had been banking with VBS Mutual Bank since 1989 in Thohoyandou Limpopo, South Africa. – Fear spread through poor rural communities across South Africa in November when VBS, a regional bank that catered to poorer customers, collapsed. (Photo by GULSHAN KHAN / AFP)
VBS Mutual Bank saga: Three suspects to appear in court
They’re allegedly involved in investing municipal funds to the tune of R230 million with VBS Mutual Bank between 2016 and 2018
A picture taken on December 12, 2018 shows files containing the paperwork of AUB’s Motor & Diesel Centre, owned by Mr Aubrey Mulaudzi, 56, a diesel mechanic who had been banking with VBS Mutual Bank since 1989 in Thohoyandou Limpopo, South Africa. – Fear spread through poor rural communities across South Africa in November when VBS, a regional bank that catered to poorer customers, collapsed. (Photo by GULSHAN KHAN / AFP)
Three more suspects are set to appear before the Pretoria Specialised Crimes Court on Wednesday morning, 17 November 2021, in connection with the VBS Mutual Bank scandal.
A former municipal manager of the Fetakgomo-Greater Tubatse Municipality, a former chief financial officer and a private business owner were arrested by the Hawks on Tuesday at their residences in Pretoria.
They’re allegedly involved in investing municipal funds to the tune of R230 million with the now collapsed bank – between 2016 and 2018. The trio face charges of corruption, money laundering and the contravention of the municipal finance management act.
VBS Mutual Bank: Three ex-West Rand Municipality employees nabbed
This latest arrests come just months after three former West Rand District Municipality employees were also handcuffed as part of an ongoing investigation into the VBS Bank heist. They have been implicated in financial deposits made to the bank by municipalities on the West Rand.
According to the Hawks, approximately 20 municipalities deposited an amount of R3.7 billion into VBS Mutual Bank.
“A total of R2.2 billion was repaid to the municipalities while R1.5 billion is either lost or unpaid. Some of the lost funds, amounting to R67 million, were allegedly paid as brokerage commissions to entities and individuals to attract more deposits from municipalities. This nationwide investigation has revealed that VBS employees, municipal executives and other officials received gratifications for the investments made,” said Hawks spokesperson Colonel Katlego Mogale.
A report commissioned by the South African Reserve Bank (Sarb) found that more than 50 people unduly received payments from the bank.
In March 2018, the minister of finance was appointed bank’s curator, after a criminal complaint was laid. The scam was hatched on the 4 July 2017 when the board of directors for VBS approved financial statements for the year ending 31 March 2017, making VBS to look richer while it was in fact insolvent. The financial statements were shockingly inflated.
