VBS scandal to continue

The controversy surrounding the embattled VBS Mutual Bank is continuing. The High Court ruling on the sequestration of two of the bank’s former directors was made available last week. In this ruling, Judge Moroa Tsoka did not mince his words, calling two of the former directors liars who were fuelled by greed.

A month ago, Judge Tsoka granted a provisional sequestration order against the estates of Andile Malusi Atwell Ramavhunga and his wife, as well as against Mbulaheni Robert Madzonga. Ramavhunga was the former chief executive officer (CEO) of VBS Mutual, whereas Madzonga was the former CEO of Vele Investments, the largest shareholder of the bank. Provisional sequestration orders were previously granted against three other VBS directors: Tshifhiwa Matodzi, the former chair of VBS’s board of directors, Phillip Truter, the bank’s chief financial officer, and Phophi Mukhodobwane, the bank’s general head of treasury and capital management.

“VBS is largely dependent in the main on depositors from poor members of our society. It has been stripped off its cash assets which are the only means of survival of these poor members. Sadly, the stripping off was perpetrated by the very persons who were entrusted to look after the hard-earned monies of these poor people,” said Tsoka.

Tsoka did not find it surprising that the former directors are described as “persons in Armani suits”. He said the evidence produced thus far revealed that the six perpetrators had purchased luxurious properties and motor vehicles. “It appears that their actions were motivated by nothing else but greed. In their opinion, enough was never enough,” he said.

Closer to home, a pressure group trying to save VBS Mutual Bank continued with its activities. The Save VBS campaign was initially spearheaded by the Thohoyandou Business Forum (TBF), but it has since drawn the support of the Vhembe Business Forum and the Collins Chabane Chamber of Business. The various forums want the curator of VBS Mutual to reverse its decision to allow Nedbank to handle pay-outs to VBS’s customers.

During a protest march, the forums urged Nedbank to return the money to the Reserve Bank. They feel that VBS Mutual is a local bank worth saving, and that the step to allow Nedbank to provide service to its customers is eroding the client base and will not add to its chances of ever operating again. A memorandum of demands was handed over to Nedbank officials during the march.

According to Mbulungeni Ntsieni, TBF's chairperson, Nedbank maintains that it is only a “messenger” and not party to the decision of facilitating VBS clients’ accounts. “We will be mounting additional pressure on Nedbank until it comes to its senses, realising that it does not operate in a vacuum,” said Ntsieni.

Ntsieni said that all stakeholders had agreed to come up with new initiatives that would put pressure on the key players who will decide on the fate of VBS. Ntsieni concluded that all the masterminds who had defrauded the bank must face the full might of the law. “We welcome all investigations that are aimed at uncovering all the culprits, because these people have undermined and compromised the purpose of the bank,” he said.

Nedbank’s Divisional Executive: Retail and Business Banking, Mr Dave Schwegmann, said Nedbank disagreed with the demands on the memorandum. “The bank is unable to accede to any of the demands set out in the memorandum. We would like to encourage you to address any questions or concerns about the resolution plan decided upon by the curator, the minister of Finance and the SARB directly with the curator. Nedbank will continue to fulfil its obligations as agreed with the curator and the SARB. We are happy to be able to play a part in alleviating hardships and preventing losses to some of VBS’s depositors,” said Schwegmann.

Perhaps the last words should go to Judge Tsoka who, in his ruling, quoted from Atlas Shrugged, a masterful novel by free-market icon Ayn Rand. In the novel, published in 1957, she says:

“... when you see that men get rich by graft and pull rather than by work, ... when you see corruption being rewarded and honesty becoming self-sacrifice you may know that your society is doomed”.

News - Date: 22 September 2018

Tracy Ngobeni

Tracy Ngobeni is a 20-year-old intern who is doing her final year in journalism at Tsh­wane University of Technology. She was born and bred in Olifantshoek. She started her journalism career in 2017, after submitting her articles to the Record Noweto Newspaper in Pretoria. Her heart beats for print media because she believes that writing can heal reader's souls.

Email: [email protected]