This week, two municipalities proved to have heeded a call from the Limpopo ANC for action to be taken against municipal officials who contravened the Municipal Finance Management Act (MFMA), by investing millions in the controversial VBS Mutual Bank.
The Giyani local municipality in the Mopani region was the first to crack the whip, followed by the Vhembe district. The two municipalities are currently facing serious financial challenges, which, in turn, affect service delivery.
“The dismissal of CFO [chief financial officer] Hitler Maluleke comes weeks after he was suspended amid allegations that he contravened the MFMA with regard to the investment of municipal funds into the VBS Bank,” said Giyani municipal spokesperson Steven Mabunda yesterday.
Mabunda said the municipality had invested R158 million. Of late, the municipality has been under pressure to deliver basic services such as potable water, waste removal, road construction and other services.
Meanwhile, the Vhembe district, which invested R300 million in VBS, followed suit. The municipality gave two of its senior officials letters of notice to suspend them.
Municipal manager Reuben Rambado and CFO Nyiko Machavi were given seven working days to explain why they shouldn’t be suspended. The letters were handed over on Friday.
The Citizen reported on Thursday that a special council meeting to suspend the CFO on Thursday was abruptly withdrawn without apparent reason. Sources privy to the meeting said this was after Machavi allegedly threatened to spill the beans about the actual looters of VBS.
The action in Giyani and Vhembe comes only days after the ANC ordered Limpopo Premier Stan Mathabatha, who is also party provincial chairperson, to take action against those who invested in the bank.
In February, National Treasury warned municipalities not to invest with VBS as it was a mutual bank, and in doing so violated the MFMA.
In a PEC meeting last week, ANC Limpopo secretary Soviet Lekganyane gave municipalities until the end of this month to take action against those involved in the alleged looting.