VBS Case | Accountability Tracker

POLITICIANS & ROYALTY

Municipal officials colluded with VBS.

Flow of Money

Loans and payments

VBS employees conspired with municipal officials, politicians, auditors and Venda royalty to loot the bank of almost R2 billion. When the bank was placed under curatorship, many poor, retail depositors were left destitute.

KPMG

Municipalities illegally deposited money into VBS.

VBS SENIOR EXECS

PIC

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Loans without repayment given to individuals complicit in scheme for luxury cars and houses. VBS purposefully did not collect its debts.

Payments to front companies that belonged to VBS executives and others.

Municipal officials colluded with VBS to deposit municipal money in the bank and received loans and payments in exchange. Dozens of other municipal officers are thought to be involved although not all of their names are readily available.

DEPOSITS - 14 Municipalities illegally deposited R3.2bn in VBS. Indigent locals deposited their life savings, stockvels and burial society savings in VBS.

Toni Mphephu Ramabulana

Venda King

Alleged misconduct: Encouraged municipal officials to do business with VBS. Received financing for multiple luxury vehicles that he was not required to repay.

Status of accountability: VBS’s liquidator, Anoosh Rooplal, secured a court order directing Ramabulana to repay R5.6m related to the financing he received for three luxury vehicles after his leave to appeal was dismissed. Ramabulana declined to surrender the vehicles.

Tshifhiwa Matodzi

VBS Board Chair

Alleged misconduct: Reportedly orchestrated the corruption at VBS by securing the Venda king’s support for VBS, paying irregular 'bonuses' to VBS beneficiaries using his front company Vele and others, and supporting illegal deposits of municipal funds.

Status of accountability: Arrested in June 2020 and charged with fraud, corruption, tax evasion and money laundering. In a plea agreement, he pleaded guilty to 33 counts, and was sentenced in July 2024 to 495 years in prison. He will serve an effective 15 years.

David Makoena

West Rand District Municipality municipal manager

Alleged misconduct: Accused, along with fellow West Rand District Municipality officials, of illegally investing R347m of the municipality's funds in VBS.

Status of accountability: Facing criminal charges related to corruption and contravention of the Municipal Finance Management Act of 2003.

Eddie Makamu

Collins Chabane Municipality Chief Financial Officer

Alleged misconduct: Illegally invested R120m of the Collins Chabane Municipality's funds in VBS.

Status of accountability: Faces two counts of violating the Municipal Finance Management Act of 2003, as well as four additional corruption-related charges.

Charlotte Ngobeni

Collins Chabane Municipality municipal manager

Alleged misconduct: Illegally invested R120m of the Collins Chabane Municipality's funds in VBS.

Status of accountability: Faces two counts of contravening the Municipal Finance Management Act of 2003, as well as four additional charges related to corruption.

Julius Malema

President of the Economic Freedom Fighters

Alleged misconduct: Economic Freedom Fighters received R1.8m from VBS and a further R430 000 for a house in Sandton where Malema lived for many years.

Status of accountability:VBS's liquidator, Anoosh Rooplal, could not access the Mahuna account that allegedly paid Malema. Parliament’s Joint Committee on Ethics and Members’ Interests could not conclude that Malema had received undue payments and closed the matter.

Sipho Malaba

KPMG Engagement Partner for VBS

Alleged misconduct: Obtained substantial undisclosed loans from VBS and failed to disclose this conflict of interest to his employer KPMG. Signed off on VBS' fraudulent financial statements. Personally benefited in home and vehicle financing worth R34m from VBS funds.

Status of accountability:KPMG suspended Malaba in 2018 after the VBS scandal emerged. He was arrested in June 2020 on charges of fraud, corruption, tax evasion and laundering. The trial was postponed to January 2022. The VBS liquidator, Anoosh Rooplal, argued before the courts that KPMG should be held liable for R864m in reparations stemming from Malaba's auditing work at VBS while employed by KPMG.

Ernest Nesane

VBS Non-Executive Director and Public Investment Corporation Executive Head: Legal Counsel, Governance and Compliance

Alleged misconduct: Received R16.64m in unlawful cash payments, loans and other benefits in exchange for enabling the corrupt practices at VBS while he was a non-executive director.

Status of accountability:Arrested in June 2020 on charges of racketeering, corruption, fraud, theft and money laundering. The trial was postponed to January 2022. In January 2021, the High Court in Pretoria ordered Nesane to repay R5.6m to Vele. The VBS liquidators initiated civil litigation against Nesane to recover misappropriated funds. Nesane was disbarred by the Financial Sector Conduct Authority.

Paul Magula

VBS Non-Executive Director and Public Investment Corporation Executive Head: Risk Management

Alleged misconduct: Received R12.89m in illicit cash payments, loans and other benefits in exchange for enabling the corrupt practices at VBS while he was a non-executive director.

Status of accountability: Arrested in June 2020 on charges of racketeering, corruption, fraud, theft and money laundering. The trial was postponed to January 2022. The Pretoria High Court ordered Magula to repay R6.1m to Vele and imposed an additional R6.1m penalty against him. Magula was disbarred by the Financial Sector Conduct Authority.

Floyd Shivambu

Member of the Economic Freedom Fighters and Brian Shivambu's brother

Alleged misconduct: Received payments from VBS totalling R180 000. The South African Revenue Service reportedly traced around R3.6m in cash from VBS and other undeclared income sources to Floyd's personal bank account.

Status of accountability: Parliament’s Joint Committee on Ethics and Members’ Interests found him guilty of breaching the ethics code by failing to disclose the R180 000 payment he received from VBS. On 3 October 2023, the Committee recommended to the National Assembly that he be penalised with the loss of nine days’ salary.

Brian Shivambu

Sgameka Director and Floyd Shivambu's brother

Alleged misconduct: Served as a frontman to facilitate Julius Malema and Floyd Shivambu benefiting from corruption at VBS. Received around R16m, including R1.8m paid to him through front companies.

Status of accountability: In March 2020, Shivambu signed an acknowledgement of debt amounting to R4.55m owed to Vele by his company, Sgameka Projects. The South African Revenue Service has pursued Shivambu for an outstanding R28m in taxes.

Philip Truter

VBS Chief Financial Officer

Alleged misconduct: Played a pivotal role in manipulating VBS’ banking systems, enabling the preparation of fraudulent annual financial statements and submitting fraudulent DI returns.

Status of accountability: Turned state’s witness and pleaded guilty to charges of fraud, corruption, money laundering, offences described in the Prevention of Organised Crime Act and failure to file a tax return. In October 2020, he was sentenced to an effective seven-year jail term.

Andile Ramavhunga

VBS Chief Executive Officer

Alleged misconduct: Benefited from the illegal deposits of municipal funds into VBS, receiving an estimated R29m from the fraudulent scheme.

Status of accountability: Arrested in June 2020 and charged with fraud, corruption, tax evasion and money laundering. In July 2020, the Supreme Court of Appeal dismissed his and his wife’s applications for leave to appeal an order to seize their assets. His trial is due to proceed in September 2024.

Dumisani Tshuma

KPMG partner

Alleged misconduct: Received financing from VBS that was channelled through companies co-owned by his wife and the wife of his KPMG colleague, Sipho Malaba, worth an estimated R28m.

Status of accountability: In December 2023, Tshuma pleaded guilty to misconduct charges brought by the Independent Regulatory Board for Auditors (IRBA). He was fined R200 000, the maximum financial penalty allowed under IRBA's rules. The IRBA stated it would pursue Tshuma for the reimbursement of R2.8m to cover the costs incurred during the investigation into Tshuma's conduct in the VBS matter.

About this case study: This narrative explains the nature of corrupt activities relating to high-profile cases, and is produced in the public interest. It relies on the final reports from the Judicial Commission of Inquiry into Allegations of State Capture, Corruption, and Fraud in the Public Sector, including Organs of State (the Zondo Commission), court documents, books, investigative journalism reporting, and other media articles, all in the public domain. The ISS has made all reasonable attempts to report the details accurately. Details for the cases in the Zondo Commission reports are provided up to December 2023. Further updates are in the ‘Recent Case Updates’ section below.

ISS Analysis Recent Case Updates

The Story

VBS Mutual Bank catered to civil servants, small business owners and individuals in Limpopo. Employees at the bank allegedly conspired with municipal employees, middlemen, politicians, auditors and Venda royalty to defraud the bank of almost R2bn. Many people were left destitute when the bank was placed under curatorship after being declared insolvent and bankrupt in 2018. VBS Mutual Bank (referred to as VBS) financially rewarded intermediaries for connecting the bank with municipal employees, who were allegedly bribed to facilitate large short-term deposits into VBS.

These sizable deposits reportedly served as a means for corrupt individuals to acquire cash for financing extravagant lifestyles. Philip Truter and Phophi Mukhodobwane from VBS were accused of playing crucial roles in crafting fraudulent ledgers to conceal these illicit transactions. Sipho Malaba, an employee of KPMG, allegedly approved false audit reports that further perpetuated the deception.

InsightISS Analysis

Our key insights on this case

As a cooperative financial institution owned by its depositors, VBS Bank was supposed to serve the interests of the local community.

From approximately 2015, municipal officials received corrupt gratifications to invest municipal funds at VBS, in violation of laws prohibiting municipalities from investing in mutual banks.

VBS bankers distributed depositors’ investments to various beneficiaries, including themselves, high-ranking politicians, political parties and municipal officials. This financial misconduct resulted in the bank’s liquidation, with many investors losing their investments.

Distributions took various forms besides outright donations: the creation of fictitious deposits, the irregular crediting of accounts, soft loans that were not repaid and irregular commissions.

Corruption at VBS was reportedly facilitated and legitimised by auditors KPMG, which signed off on questionable audits, an example of the role of multinationals in state capture.

Criminal conduct allegedly included fraud, corruption, racketeering, and theft. It probably also included accounting offences under the Companies Act 71 of 2008 and tax offences.

Unethical conduct included pervasive conflicts of interest and poor corporate governance practices. Various forms of coercion including bullying were probably used to create an organisational culture that facilitated systemic corruption.

This is a case study of the type of corruption known as ‘theft’ or ‘plunder’, the most economically destructive type of corruption.

Lessons for prevention and early intervention.

Warning signs that there were problems at VBS included the tightening liquidity situation, the irregular practice of paying significant fees to ‘agents’ to attract new depositors and the excessively high salaries and bonuses being paid.

The increasingly opaque ownership structure, and change of strategy from conservative deposit-taker, to a more ambitious, higher-risk loan extension strategy, should have attracted greater scrutiny as the savings of the community were being put at risk.

Losses and significant corruption could have been prevented had the reckless and irregular practices been stopped. These included extending loans without appropriate approvals, employees doing business with the bank, and auditors benefiting from personal loans.

Importantly, municipalities should never have deposited funds at VBS. The Public Finance Management Act does not allow them to place funds in a mutual society, as it is considered to be too risky for the investment of public funds. The dire consequences of the violation of this regulation demonstrated this point.

Municipalities Involved

Timeline

Key Players

Municipalities that illegally deposited money into VBS

Municipality	Amount deposited	Amount lost
Vhembe District Municipality	R1.07bn	R300m
West Rand District Municipality	R389m	R227m
Moretele Local Municipality	R258m	R50m
Fetakgomo Tubatse Local Municipality	R230m	R230m
Dr Ruth Segomotsi Mompati District Municipality	R210m	R150m
Elias Motsoaledi Local Municipality	R190m	/
Makhado Local Municipality	R155m	R60m
Greater Giyani Local Municipality	R153m	R153m
Lepelle-Nkumpi Local Municipality	R150m	R150m
Collins Chabane Local Municipality	R120m	R120m
Mahikeng Local Municipality	R89m	R82m
Ephraim Mogale Local Municipality	R80m	R80m
Madibeng Local Municipality	R60m	R30m
Merafong City Local Municipality	R50m	R51m
TOTAL	R3.2bn	R1.7bn

2013	In 2013, Tshifhiwa Matodzi, the soon-to-be board chair of VBS, made a proposal to the Venda king, Toni Mphephu Ramabulana, that he buy shares in VBS. Mphephu reportedly benefitted from a tax-free government salary of R1.1m per year and had considerable influence over the citizens, local municipalities and aspects of government in Limpopo – Matodzi saw potential in the King's wealth and reach. Paul Makhavhu, a close advisor to Mphephu, arranged the deal with Matodzi on behalf of the King. The deal gave rise to the formation of Dyambeu Investments. Dyambeu Investments was jointly owned by: Brilliant Telecommunications (Matodzi’s enterprise) – 24.5% stake Promafco (David Mabilu's company) – 24.5% stake The Vhavenda Trust (representing the Venda royalty) – 51% stake Dyambeu subsequently acquired a 26% stake in VBS at a cost of R6m. In exchange for the King openly supporting VBS as a safe bet and encouraging municipal officials to do business with VBS, the King allegedly received financing for several luxury vehicles, including a Range Rover, BMW and Mercedes Benz. He reportedly never paid these vehicles off.
2014	Andile Ramavhunga, a friend of Matodzi from university, was appointed Chief Executive Officer (CEO) of VBS.
2015	Matodzi became chairman of the board of VBS. Matodzi and Ramavhunga initiated a strategy to transform VBS into a more profitable venture. This entailed shifting from their reliance on small retail depositors to targeting substantial, short-term deposits from municipalities and state-owned enterprises. This was allegedly facilitated by bribing municipal employees to ignore the legislation that governs how municipalities should invest their money – the Municipal Finance Management Act, 56 of 2003 (MFMA) – which states that municipalities are not allowed to deposit into mutual banks. By the time VBS collapsed, 15 municipalities had cumulatively invested R1.5bn into VBS with a minimal chance of recovery. The Parliamentary Monitoring Group states that municipal deposits accounted for almost 75% of VBS's total deposits at one point. VBS executives allegedly rewarded middlemen such as Ralliom Razwinane, Takunda Mucheke, Tshianeo Madadzhe and Sechaba Serote with payments and financing opportunities for setting up deals between VBS and the municipalities. These financing opportunities, in the form of loans and overdrafts, were distributed but never intended to be paid back. The money was reportedly used to finance frivolous luxury items.
2017	Truter served as Executive Director and Chief Financial Officer (CFO) at VBS. He reportedly facilitated the preparation of fraudulent annual financial reports for 2017 and submitted dishonest diminishing regulatory returns (DI returns). According to the 2017 Audit Report, VBS’ financial statements amounted to over R770m. Later, it was revealed that this amount was exaggerated by almost R700m. Truter allegedly received a significant payment from Vele’s bank account due to his involvement in the corruption. Malaba, a partner at KPMG, was allegedly complicit in covering up the ‘cash hole’ in the 2017 audit by KPMG. He signed off the 2017 audit reports despite knowing the liquidity positions stated in the report were inflated and misrepresented. Malaba also benefited from loans from VBS that were granted to him at arms-length and forwent essential disclosure duties. An example of this was the overdraft facility given to companies that his wife directed and had significant shares in, Betanologix and Ihaawu Lesizwe. The wife of Dumisani Tshuma, a colleague of Malaba, was the co-director and a significant shareholder in Betanologix. Malaba admitted that it was, in fact, he and Tshuma who were behind Betanologix and not their wives. The financing provided to these companies totalled around R28m. At least one payment of R200 000 was made from Betanologix to Tshuma’s personal account; a payment of R450 000 was made from Betanologix to Malaba’s personal account; and numerous other payments were made via other front companies. When VBS went into curatorship, Ihaawu Lesizwe owed it around R11.5m.
2018	VBS was declared insolvent and bankrupt and placed under curatorship. Many locals who had deposited their stockvel (credit union) or burial society savings into the bank were left destitute – their deposits were lost as part of the municipal money that corrupt individuals used to finance cars, houses and make payments to front companies. Of the R3.2bn that the municipalities illegally deposited into VBS, R1.7bn was not recoverable.

VBS Senior Executives
	Tshifhiwa Matodzi Chairman of Board of VBS Alleged misconduct: Secured the Venda King’s support for VBS, paid irregular 'bonuses' to beneficiaries involved in VBS using his front company Vele and others. He supported the illegal deposits of municipal funds. Status of accountability Arrested in June 2020 and charged with fraud, corruption, tax evasion and money laundering. The trial was postponed from October 2021 to January 2022 because some of the accused were resolving issues with the financing of their legal teams. Entered into plea agreement with NPA in 2024 (refer to Recent case updates).
	Andile Ramavhunga VBS CEO Alleged misconduct: Benefited from the illegal deposits of municipal funds into VBS, receiving an estimated R29m for the fraudulent scheme. Status of accountability Status of accountability: Arrested in June 2020 and charged with fraud, corruption, tax evasion and money laundering. The trial was postponed from October 2021 to January 2022 because some of the accused were resolving issues with the financing of their legal teams. No further public updates have been provided. In July 2020, the Supreme Court of Appeal dismissed his and his wife’s applications for leave to appeal an order to seize their assets, including their home.
	Robert Madzonga VBS COO and former CEO of Vele, Matodzi’s front company Alleged misconduct: Reaped large rewards for his complicity in the corrupt practices at VBS in the form of undeclared income, receiving around R30m in undisclosed income. Status of accountability In August 2019, the South Gauteng High Court placed Madzonga’s estate under final sequestration. He was arrested in March 2021 on charges of racketeering, corruption, fraud, theft and money laundering. The trial was postponed from October 2021 to January 2022.
Politicians and Royalty
	Toni Mphephu Ramabulana Venda King Alleged misconduct: An early investor in VBS who publicly endorsed the bank to increase public support within Limpopo province. In return, he received financing for multiple luxury vehicles that he was not required to repay. Encouraged municipal officials to do business with VBS. Status of accountability After his leave to appeal was dismissed, VBS’s liquidator, Anoosh Rooplal, secured a court order directing him to repay R5.6m related to the financing he received for three luxury vehicles. He declined to surrender the vehicles.
	Brian Shivambu Sgameka Director and Floyd Shivambu's brother Alleged misconduct: Served as a frontman to facilitate Julius Malema and Floyd Shivambu benefiting from corruption at VBS. Received around R16m, including at least R1.8m paid to him through front companies Sgameka and Grand Azania. His personal bank statements showed lavish expenditure funded by monies from VBS, including around R152 000 at Gucci, R115 000 at Louis Vuitton, R81 000 at Burberry, R69 000 at Salvatore Ferragamo, R22 000 at Fabiani and R14 000 at Versace. His wife, Siphesile Pezi, also allegedly received at least R500 000 in cash and R400 000 as a deposit on a Mercedes-Benz from VBS funds. Status of accountability In March 2020, Brian Shivambu signed an acknowledgement of debt amounting to R4.55m owed to Vele by his company, Sgameka Projects. The South African Revenue Service (SARS) has pursued Brian Shivambu for outstanding R28m in taxes.
	Floyd Shivambu Member of the Economic Freedom Fighters and Brian Shivambu's brother Alleged misconduct: He and Malema used Brian Shivambu to receive payments from VBS. Payments totalling R180 000 were channelled from front companies such as Floyd's Grand Azania and Brian Shivambu's Sgameka into Floyd Shivambu's personal bank account. SARS reportedly traced around R3.6m in cash flow from VBS and other undeclared income sources into Floyd Shivambu's personal bank account. Status of accountability Parliament’s Joint Committee on Ethics and Members’ Interests found Floyd Shivambu guilty of breaching the ethics code by failing to disclose to members the R180 000 payment he received from VBS. On 3 October 2023, it was recommended to the National Assembly that he be penalised with the loss of nine days’ salary.
	Julius Malema President of EFF Alleged misconduct: While denying any involvement in the VBS scandal, evidence suggests that the Economic Freedom Fighters (EFF) received R1.8m from VBS and a further R430 000 for a house in Sandton where Malema lived for many years. Status of accountability VBS's liquidator, Anoosh Rooplal, was unable to access the Mahuna account suspected of having paid Malema. As a result, Parliament’s Joint Committee on Ethics and Members’ Interests was unable to conclusively determine whether Malema had received undue payments and the matter was closed. In October 2023, the Daily Maverick published an article exposing an alleged 'propaganda network' used by the EEF to protect itself from allegations of corruption and undermine the effectiveness of Parliament's committee to thoroughly probe Malema's supposed involvement with VBS.
	Kabelo Matsepe ANC youth leader in Limpopo Alleged misconduct: Acted as a middleman between municipal officials and VBS. Court evidence revealed that Matsepe’s home had a R5.4m mortgage originating from VBS, suggesting compensation for his involvement. Status of accountability Obliged to pay SARS R61.5m for outstanding income tax accrued between 2015 and 2018 after Matsepe initiated proceedings to sequestrate his estate in the High Court.
VBS
	Philip Truter VBS CFO Alleged misconduct: Played a pivotal role in the manipulation of VBS’ banking systems, enabling the preparation of fraudulent annual financial statements and the submission of fraudulent DI returns. Turned state’s witness and pleaded guilty to charges of fraud, corruption, money laundering, offences described in the Prevention of Organised Crime Act and failure to file a tax return. In October 2020, he was sentenced to an effective seven-year jail term.
	Phophi Mukhodobwane VBS Treasurer and Head of Capital Management Alleged misconduct: Admitted to facilitating corruption at VBS and receiving large sums of money from VBS (via Vele) as a reward for his involvement. Received around R31m in undue benefits for his complicity in the fraudulent scheme. Status of accountability Arrested in March 2021 on charges of fraud, corruption, tax evasion and money laundering. The trial was postponed from October 2021 to January 2022.
KPMG
	Sipho Malaba KPMG Engagement Partner for VBS Alleged misconduct: Obtained substantial undisclosed loans from VBS, presenting a clear conflict of interest he failed to disclose to his employer, KPMG. Signed off on VBS's fraudulent financial statements. Reportedly benefited personally through home and vehicle financing worth approximately R34m derived from VBS funds. Status of accountability KPMG suspended Malaba in 2018 after the VBS scandal emerged. He was arrested in June 2020 on charges of fraud, corruption, tax evasion and laundering. The trial was postponed from October 2021 to January 2022. The VBS liquidator, Anoosh Rooplal, has argued before the courts that KPMG should be held liable for R864m in reparations stemming from Malaba's auditing work at VBS while employed by KPMG.
	Dumisani Tshuma KPMG partner Alleged misconduct: Received financing from VBS that was channelled through companies co-owned by his wife and the wife of his KPMG colleague, Sipho Malaba. This financing totalled around R28m. Status of accountability In December 2023, Tshuma pleaded guilty to misconduct charges brought by IRBA. He was fined R200 000, the maximum financial penalty allowed under IRBA's rules. IRBA also stated its intention to pursue Tshuma for reimbursement of R2.8m to cover the costs incurred by the regulatory body in investigating Tshuma's conduct related to the VBS matter.
PIC
	Ernest Nesane Non-executive Director of VBS and Executive Head: Legal Council, Governance, and Compliance at the PIC Alleged misconduct: Received R16.64m in illegal cash, loans and benefits for his complicity in the VBS corruption. Status of accountability Arrested in June 2020 on charges of racketeering, corruption, fraud, theft and money laundering. The trial was postponed from October 2021 to January 2022. In January 2021, the High Court in Pretoria ordered Nesane to repay Vele R5.6m. VBS liquidators initiated civil proceedings against Nesane to pay back the money. He was disbarred by the Financial Sector Conduct Authority.
	Paul Magula VBS Non-Executive Director and PIC Executive Head: Risk Management Alleged misconduct: Received R12.89m in illegal cash, loans and benefits for his complicity in the corruption. Status of accountability Arrested in June 2020 on charges of racketeering, corruption, fraud, theft and money laundering. The trial was postponed from October 2021 to January 2022. The Pretoria High Court ordered Magula to repay Vele R6.1m and the same amount in penalties. He was disbarred by the Financial Sector Conduct Authority.
Municipal Officials
	Charlotte Ngobeni Collins Chabane Municipality municipal manager Alleged misconduct: Illegally invested R120m of the municipality’s funds into VBS. Status of accountability Faces two counts of contravening the MFMA and four other charges of corruption.
	Eddie Makamu Collins Chabane Municipality CFO Alleged misconduct: Illegally invested R120m of the municipality's funds into VBS. Status of accountability Charged with two counts of contravening the MFMA and four other charges of corruption.
	David Mokoena West Rand District Municipality municipal manager Alleged misconduct: Illegally invested R347m of the municipality's funds into VBS, along with fellow West Rand district municipal officers. Status of accountability Charged with corruption and contravening the MFMA.

RecentCase Updates

Latest developments from news sources

12 September 2024: President Ramaphosa said he wants “time and space” to consider a report submitted to him by Justice Minister Thembi Simelane regarding allegations of corruption against her. These allegations stem from her time as mayor of Polokwane when the municipality invested R349 million in VBS between September 2016 and May 2017. These investments were a contravention of the Municipal Finance Management Act which prohibits municipalities from investing with mutual banks. In 2016 Simelane received a loan of R575 000 from Gundo Wealth Solutions to buy a coffee shop in Sandton. At the time, Gundo Wealth Solutions was involved in facilitating illegal investments worth R349 million in VBS from the Polokwane municipality. Gundo’s owner, Ralliom Razwinane, is currently on trial for fraud and corruption. Simelane denies any wrongdoing. When she appeared before Parliament’s Portfolio Committee on Justice on 6 September, she told MPs that she had repaid the loan in full, in three instalments from October 2020 to January 2021, at an interest rate of 50%.
Sources:
– J Gerber, Ramaphosa wants time and space to deal with VBS-embroiled Simelane, 12 September 2024, https://www.news24.com/news24/politics/parliament/ramaphosa-wants-time-and-space-to-deal-with-vbs-embroiled-simelane-20240912
– P van Wyk and K Cowan, Justice Minister took half a million Rand loan from accused VBS investment broker in 2016, Daily Maverick, 26 August 2024, https://www.dailymaverick.co.za/article/2024-08-26-exclusive-justice-minister-took-half-a-million-rand-loan-from-accused-vbs-investment-broker-in-2016/
January 2024: KPMG and Anoosh Rooplal, VBS’ liquidator, released a statement that they had reached a confidential out-of-court settlement regarding KPMG’s audit of VBS for the financial year ending 31 March 2017. In February 2024, the Daily Maverick reported that the settlement amount was R500m. Rooplal had initially claimed damages of R864m plus interest. He will distribute the R500m among VBS’ creditors.
10 July 2024: As part of a plea agreement in terms of section 105A of the Criminal Procedure Act, Matodzi pleaded guilty to 33 counts, including corruption, theft, fraud, money laundering and racketeering activities in contravention of the Prevention of Organised Crime Act. The Pretoria High Court sentenced him to 15 years in prison. On 11 July 2024, Matodzi’s 253-page affidavit was leaked online, providing details on many of the events and activities of those involved in the VBS scandal. In his affidavit, Matodzi admits that he, certain bank officials and board members, municipal officials, political office bearers and other role players “engaged in a web of corrupt activities. The way we operated was unspoken yet well understood by those involved.”Matodzi made the following allegations in his affidavit, among others:
- In 2016, he approached Cabinet minister Zweli Mkhize to assist VBS in accessing larger facilities at the Public Investment Corporation (PIC). A payment of R2m was allegedly made to Mkhize via a third party, purportedly for an ANC supplier.
- In September 2016, he discussed with ANC Youth League leader Kabelo Matsepe and treasurer for the ANC in Limpopo Danny Msiza how they could use their political influence to source investment deposits from municipalities for VBS.
- VBS paid the EFF monthly “donations” of R5m and R1m, funnelled through a company owned by Brian Shivambu, to clean up the bank’s bad reputation after giving President Jacob Zuma a home loan for Nkandla.
- He instructed Gogoro Communications to facilitate meetings with South African Communist Party (SACP) representatives to discuss potential business relations, after the SACP published a statement linking VBS to Gupta-linked entities. He met with SACP’s Gauteng team led by Jacob Mamabolo, who requested assistance from Matodzi to settle a R3m conference bill from Birchwood Hotel in Kempton Park. The amount was paid directly to the hotel from MML Food Services.
- In August 2017, the National Treasury instructed municipalities to withdraw their investments from VBS, citing the Municipal Finance Management Act prohibiting investments with a mutual bank. National Treasury Director-General Dondo Mogajane accepted R1m in exchange for intervening, retracting the National Treasury’s withdrawal letter and granting VBS an 18-month dispensation to continue accepting municipal investments. The plan was for VBS to transition to a commercial bank by the end of the 18 months. Mogajane denies these allegations.

Public Impact

In total, VBS’s liquidators heard from 411 retail depositors, burial societies and stockvel members like Muambadzi, Raphunga and Chauke. Their deposits totalled around R67m.

Annah Muambadzi

(Photo: AFP)

Annah Muambadzi was the treasurer of her stokvel. She and other members deposited their savings at VBS Mutual Bank. When the bank collapsed, many of them lost everything. Muambadzi experienced huge financial pressure because her son was about to get married and another child was about to start university.

Aubrey Mulaudzi

(Photo: AFP)

The collapse of VBS has also hit businesses hard. Mulaudzi was forced to lay off half of his workers because he cannot afford to pay their salaries. He recounts how he started saving with VBS in 1987 and lost cash and shares worth $145,000. Mulaudzi explained that if the money was not recovered, he would be forced to close his business down. ^[3]

Margaret Chauke

(Photo: Lucas Ledwaba)

Margaret Chauke opened an account with VBS in the early 1990s. She would regularly travel 45km to the bank to make deposits. When the bank went under, Nedbank took over her savings. The experience has made her distrustful of banks and she is considering withdrawing her R60 000 and keeping it at home. In her late 60s, she slept in the cold outside VBS to secure her savings when she heard the bank was going under.

Nyawasedza Raphunga

(Photo: Lucas Ledwaba)

Nyawasedza Raphunga deposited savings she’d been collecting since the 1980s in VBS because it was endorsed by King Mphephu. When she and other elderly people heard that the bank might close down, they spent three nights sleeping in the cold outside the bank to secure their savings. She was in her late 60s at the time. She said it was hard to organise funerals for loved ones after the bank came under curatorship because the curators only paid out in instalments. She lost some of her savings to the corruption scandal.