Government to institute legal action to recover VBS money

Speaking during a briefing of the portfolio committee on Cooperative Governance and Traditional Affairs (Cogta) on Tuesday, Cogta minister Zweli Mkhize said that the outcome of forensic investigations into the municipalities which invested in VBS Mutual Bank will allow government to take action against those implicated in the mismanagement of municipal funds.

These are the municipalities that invested with #VBS. pic.twitter.com/TOw1XgF3Ov

— Scapegoat (@AndiMakinana) October 23, 2018

The status of municipalities which have invested in VBS Mutual Bank formed the focus of the briefing in which Mkhize revealed that the loss of the money invested in VBS hampered the functioning of the affected municipalities.

#Mkhize In the history of interventions, we didn't dissolve municipalities, we appointed administrators. You don't just go in when your case is not properly motivated. #VBS #Cogta

— ANC Parliament (@ANCParliament) October 23, 2018

He also added that the government would provide support to affected municipalities to improve their internal controls but emphasised that the government would not be providing bailouts.

Mkhize also shared details about a plan to combine the respective Cogta departments at provincial governments and municipalities as part of the lawsuit.

#Mkhize The number of municipalities that are under intervention is large. Currently,there are 24 municipalities under the intervention,they are not necessarily part the VBS thing. #VBS #Cogta

— ANC Parliament (@ANCParliament) October 23, 2018

“The report from the Reserve Bank has indicated the very crude abuse of finances which were destined for poor communities. It creates an impression we are not only dealing with the situation where investments were taken to the Mutual Bank which was illegal and unprocedural, but also, inside the institution was a systematic, structured, fraudulent process siphoning money out of municipalities, out of the bank,” said Mkhize.

Further forensic investigations have been launched in provinces such as Limpopo, North West, and Gauteng and Mkhize believes the outcome of these investigations should be able to help the government “pinpoint individuals” implicated in order to allow for disciplinary proceedings and criminal complaints to be instituted against them.

Mkhize stresses that forensic investigations in municipalities must be concluded first to take action against those in municipalities responsible for the VBS investments. @fin24 @TeamNews24

— Lameez Omarjee (@LameezOmarjee) October 23, 2018