Advocate Terry Motau has released his report into what might be the biggest banking scandal ever to be uncovered in South Africa.
Motau was tasked by the South African Reserve Bank (SARB) to investigate the rampant looting which took place at VBS Mutual Bank.
The report which is entitled “The Great Bank Heist” was released on Wednesday, provides an in-depth and incredibly detailed insight into how 50 people were responsible for looting more than R1 billion from the bank and how these individuals planned and executed looting on such a massive scale.
The report makes it clear how the poorest of the poor, the elderly, ordinary South Africans with dreams of a better life and even Municipalities were conned into depositing their hard earned money into the bank.
Motau partnered with law firm Werksmans to conduct the investigation. Motau and Werksmans roped in specialist cyber and forensic investigators to ensure all an unimpeachable chain of evidence was maintained at all times.
1. VBS Mutual Bank was placed under the curatorship of the SARB in March this year. The Economic Freedom Fighters (EFF) immediately took an attacking stance to efforts by the SARB to save the bank which the party labelled as an attempt by the powers that be to attack a black-owned bank.
VBS was placed under curatorship after various municipalities and investors tried to simultaneously withdraw large sums on money from their accounts, this led to a critical liquidity crisis. The decision to place the bank was taken to protect the interests of the public and ordinary VBS clients.
2. The report found 53 people illegally received more than R1 billion The report has identified at least 53 individuals who through various money laundering, fraud and reckless business practices benefited from a combined R1.89 billion between 2015 and March 2018. ANC officials, EFF deputy president Floyd Shivambu’s brother Brian and royalty are among those named in the report.
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3. Municipalities were not legally able to bank with VBS The Municipal Finance Management Act (MFMA) was actually written to prevent municipalities from banking with VBS (or any other mutual bank). The act was written by Ismail Momoniat the same Treasury official who was the object of an ugly racially charged attack led by Floyd Shivambu.
4. VBS officials paid a group of SATAWU officials R1.5 million to secure a R1 billion cash injection VBS officials realised that their large-scale fraudulent activities were not sustainable. To avoid a collapse and exposure the officials bribed a group of South African Trade and Allied Workers Union (SATAWU) officials R1.5 million in order to secure a R1 billion cash injection from PRASA in 2017.
5. The Shivambu factor The report identified an individual called Brian Shivambu who has according to dailymaverick been confirmed as EFF deputy leader Floyd Shivambu’s brother as a major benefactor of the entire VBS scandal. Brian received R16 148 569 from the bank in what is termed gratuitous payments.
The report uncovered bank statements of these payments. Floyd received around R10 million from his younger brother. The payments were made by a company owned by Brian into Floyd’s personal bank account. Investigators did not rule out other possible money flows between the Shivambu brothers.
6. The EFF’s role The EFF itself has been implicated in the scandal thanks to an alleged R1.3 million payment which it received from VBS. Far more damaging for the party is the revelations about the involvement of its deputy leader.
The EFF has remained eerily silent since the report was released on Wednesday night with none of its usual fire and attacking language which usually accompanies such revelations emanating from the party. Instead, the party has released a generic and bland press release on the matter.
7. The Reserve Bank has handed the report and other documents to law enforcement The SARB said it had sent a copy of the report and all other documents which might be relevant but not part of the report to law enforcement agencies.
The bank has recommended that 53 persons named be charged with fraud but said ultimately that decision wrested with law enforcement officials.
8. VBS officials have confessed Motau revealed that several high-ranking VBS officials have confessed to their roles in the heist and helped the investigation uncover schemes like kickbacks and middlemen.
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