The ANC’s Jacob Zuma is in a big financial crisis with his multi-million Rand loan he received from bankrupt VBS Mutual Bank and now has to pay back the money.
Along with that, there are the million Rand court costs to be paid while more court cases are being filed in an effort to be cleared of the debt.
The amount of more than R7 million borrowed from VBS can be claimed any day, and then Nkandla can be compromised.
Although the Nkandla complex was but controversially erected with the largest share of the cost financed from the state coffers, it is doubted how much the real value of the property is being erected in a strange rural area.
Meanwhile, it has been reported that Zuma is also still a full year in arrears with the payment of his loan.
According to News24, VBS Mutual Bank’s liquidator, Anoosh Rooplal, has filed an application with the Pietermaritzburg High Court for an order that will force Zuma to pay, or an order that the property may be confiscated.
Nkandla is on the farm Nxamalala owned by the Ingonyama Trust in KwaZulu-Natal.
Zuma took out the loan from VBS when it was forced three years ago to pay R7.8m to the Reserve Bank. This was part of the expenses for the extensive improvements to Nkandla, which cost a total of R250 million.
In March 2016, the Constitutional Court ruled the then public protector, Adv. Thuli Madonsela’s affirmative action prescription – that Zuma must pay for certain additions – is valid.
These additions were initially designed as safety enhancements, but they included a swimming pool, amphitheater, chicken coop and cattle herd.
According to court documents filed by Rooplal, he and VBS sent letters to Zuma for the first time in August last year. He was then R109 568 in arrears.
Zuma then paid “sporadically, but the payments were all less than the agreed monthly installment,” the court documents say.
His installment is R69 000 per month which had to be repaid over a period of 240 months (20 years). The total loan amount was just under R8 million.
If he repays everything, the amount – including interest – will amount to R16 million.
The overdue amount has meanwhile grown to more than R550 000 and the bank is now demanding the full outstanding amount of R7,3 million.
According to the loan agreement, VBS could already demand full repayment within 20 days of missing a single installment. The bank never did.
Rooplal did, however, contact Zuma’s legal representatives on a regular basis in an attempt to get him the arrears. It was unsuccessful every time.
Zuma must now indicate before Saturday whether he will oppose the application. If so, he must submit his answering statement within 20 days thereafter.
VBS was liquidated last year and it emerged afterwards that the bank’s management had looted about R1,8bn at the institution.