Sipho Mabena
Premium Journalist
1 minute read
9 Nov 2018
6:40 am

No sign of municipality’s R10m it withdrew from VBS Bank – EFF

Sipho Mabena

The money was allegedly deposited into the municipality’s account before the bank collapsed, but there is no proof of what happened to it.

VBS Mutual Bank. Picture: Twitter

The Dr JS Moroka local municipality in Mpumalanga is allegedly unable to account for R10 million it invested in VBS Mutual Bank and withdrew prior to the bank’s collapse.

An amount of R178 000 in interest on this investment was also received.

The council’s agenda dated March 28, states that the municipality invested R10 million with VBS on December 6 last year.

The document states that in February the municipality requested the funds and was paid in March.

Fifteen municipalities invested close to R1.5 billion in VBS. This is essentially lost, but the Dr JS Moroka municipality dodged the loss by withdrawing its investment early.

But opposition councillors said there was no sign of what happened to this money.

“We are told the money was deposited into the municipality’s account, but there is no proof of what happened to it.

“We want a forensic investigation to trace the funds and ensure it returned to the municipality’s coffers and what it was spent on,” said Economic Freedom Fighters’ councillor Jack Malatjie.

He said that despite the return of the funds, the municipality was broke and unable to pay service providers on time.

The director of one security company contracted to the municipality, who wanted to remain anonymous, said last month the municipality informed him that it was in financial difficulties.

Dr JS Moroka municipality mayor Thulare Madileng said the returned VBS investment was spent on salaries and paying for services such as phones and electricity.

He promised to furnish proof, but yesterday he made a U-turn, saying the VBS matter was sensitive.

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