Major financial crisis stares FTLM in the face
Among services affected by the VBS debacle and FTLM's lack of funds is the Operation Mabone initiative, it was earmarked to electrify about 21 local villages. The project stopped in 2017.
BURGERSFORT – The Fetakgomo Tubatse Local Municipality (FTLM)’s mayor, Johannes Maudu Phokane, said that he was unaware that investing in VBS Mutual Bank was illegal.
Phokane was speaking during an interview with eNews on Monday at FTLM’s civic centre. “We couldn’t have just deliberately invested where we were not supposed to invest. It was an issue of faulty interpretation of the law,” the mayor said.
FTLM invested R230 million with the mutual bank. He said the money was invested in intervals and the FTLM was expecting to get 9,5 per cent interest from those investments.
“We consulted different banks and we decided to invest in VBS as it had high interest.”
The municipality is reportedly bankrupt, but Phokane denied this, saying, “they are in a financial crisis and not bankrupt”.
“We might have difficulty paying workers in November, but we are on it and we are attending to it,” said Phokane, when pressed for answers.
According to insiders at FTLM, the municipality has also applied for a bank overdraft from Standard Bank, which was reportedly rejected. This was to support payments of salaries in the upcoming months. When asked again if the municipality was in a crisis, Phokane said they were facing financial challenges.
“We are saying we foresee a situation were we might not be able to have enough finances to pay our workers, and obviously that will be a challenge. We are not bankrupt; we just don’t have enough money.”
The South African Municipal Workers Union (Samwu)’s Colin Dlamini said they were disturbed by the current state of FTLM. “We are not told anything about the management of FTLM. We are saddened by the municipality failing to put down budget for service delivery.”
Dlamini claimed the VBS investment by FTLM was orchestrated by the management of the municipality.
“It should be the municipal manager (MM) and the chief financial officer (CFO), according to the municipal policy, all investments can be done by the administration department without the interference of the political head,” he said.
Limpopo’s DA leader Jacques Smalle said, “We urge the ANC provincial chairperson and premier, Stan Mathabatha, to show leadership by recalling all the municipal officials, mayors and ANC officials who are implicated in the VBS saga and ensure that these corrupt individuals face the full might of the law, as they are not fit to hold public office.”
Among services affected by the VBS debacle and FTLM’s lack of funds is the Operation Mabone initiative, it was earmarked to electrify about 21 local villages. The project stopped in 2017.
