News / South Africa

Ilse de Lange
2 minute read
13 Nov 2018
10:45 am

Bankrupt VBS finally liquidated

Ilse de Lange

The reserve bank brought an application to liquidate the bank, which it said was hopelessly insolvent and beset by massive fraud.

SARB governor Lesetja Kganyago. Picture: Moneyweb

The High Court in Pretoria has granted an urgent order for the final liquidation of the fraud and corruption-marred VBS Bank.

Judge J W Louw took but a few minutes to grant the order, finally winding up VBS after an application by the SA Reserve Bank’s Prudential Authority (PA) which said the bank was hopelessly insolvent and beset by massive fraud.

The application was not opposed. The PA has recommended the appointment of Anoosh Rooplal as the bank’s liquidator.

The PA said in court papers it was not in the interests of the depositors and the public, where much debate presently raged about the fate of the bank, for the present status quo to remain.

“Speculation regarding what is to become of VBS and criticism against the applicant and the Reserve Bank for alleged inaction subsequent to receipt of the investigator’s report is a status quo that cannot endure.

“VBS must be wound up on an urgent basis and a liquidator appointed so that the necessary civil and criminal proceedings can be pursued to hold those accountable for the demise of VBS and so as to achieve as great a recovery as possible for the creditors of VBS.

ALSO READ: ANC heads may roll after NEC meeting on VBS

“…While VBS is currently under curatorship pursuant to a decision taken by the minister of finance on March 10, the PA is of the view that the curatorship must now be terminated and VBS must be placed in final winding-up.

“This is a result of the fact that VBS is hopelessly insolvent and massive frauds have been perpetrated against it.”

A damning report by advocate Terry Motau, who was appointed to investigate the bank’s collapse, was released last month in which he detailed looting at VBS amounting to over R1.8 billion and identified the role of political players from the ANC and EFF, bank executives, and a former partner of auditing firm KPMG in the bank’s collapse.

The report recommended that more than 50 individuals, including the bank’s former executives and their associates, politicians, and auditors, be criminally charged and held liable in civil proceedings.

The bank’s former top executives, Tshifhiwa Matodzi and co-director Robert Madzonga, who were implicated in Motau’s report as facilitating the looting, have vehemently maintained their innocence.

Motau described the bank as “corrupt and rotten to the core” and said there was “hardly a person in its employ in any position of authority who was not in some way or the other complicit” and found there was “wide-scale looting and pillaging of the monies placed on deposit at VBS” (including by many cash-strapped local municipalities).

For more news your way, download The Citizen’s app for iOS and Android.