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Hawks arrest Giyani municipality CFOs for R148m VBS corruption
Police said large amounts of money were paid to VBS Mutual Bank as 'commissions'. Some of this was allegedly laundered through other bank accounts.
The trio will make their first court appearance on Wednesday. Photo: iStock
Two senior officials at the Limpopo’s Greater Giyani Local Municipality and a businessman were arrested by the Hawks on Tuesday morning for corruption linked to the VBS Mutual Bank saga involving more than R148 million.
The Directorate for Priority Crime Investigation (Hawks) serious corruption investigation unit made the arrests two weeks after a large number of ANC councillors boycotted a Moses Kotane Local Municipality meeting after they refused to rescind a council resolution to appoint a new CFO, despite him facing fraud and corruption charges also in connection with VBS Mutual Bank.
ALSO READ: Moses Kotane ANC councillors boycott council, demand that Mbalula address them
The Giyani accused
A 64-year-old man who was previously the chief financial officer and acting municipal manager for the Giyani municipality was arrested in Lulekani. He faces charges of contravention of the Municipal Finance Management Act (MFMA), corruption and money laundering.
A 42-year-old woman was arrested in Giyani. She was a budget manager, acting chief financial officer, and currently the chief financial officer of the municipality. She is facing charges of flouting the MFMA.
The third accused, a 33-year-old businessman, was arrested in Muhuya village, Thohoyandou, on allegations of money laundering.
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How they allegedly did it
During 2017, two of the accused invested a total of R148 million into VBS Mutual Bank.
“Large amounts were paid to VBS affiliated companies as so-called ‘commissions’,” police ‘said.
“Some of this money was laundered through several bank accounts, including that of the third [accused].
“From the [accused’s] company, a total amount of R87 600 was paid to the first [accused] over a period of time as gratification which was a great loss to the Giyani Municipality.”
The trio will make their first appearance on Wednesday at the Giyani Magistrate’s Court for formal bail applications.
Mzwandile Mkhize debacle
The case at nearby Moses Kotane Local Municipality can be compared to this one.
Newly appointed chief financial officer, Mzwandile Mkhize is also charged on allegations emanating from the VBS Mutual Bank saga.
Mkhize, who was previously income and expenditure manager at West Rand municipality in Gauteng, along with former municipal manager David Mokoena and former chief financial officer Romeo Mohaudi, allegedly authorised an investment of R347 million of municipal funds into the VBS Bank in contravention of the Municipal Finance Management Act.
But Mkhize was subsequently appointed by the Moses Kotane Local Municipality last year, despite the charges. He was recommended for appointment by Moses Kotane municipal manager Mokopane Letsoalo, a recommendation endorsed by the council.
But the appointment was challenged by a local ward councillor, Matsapa Mabula. In November, Mabula’s lawyers asked Letsoalo to withdraw his recommendation for Mkhize’s appointment to council, which was sitting on the same day.
But Letsoalo refused, saying Mabula’s accusations were “baseless” and he acted properly to recommend Mkhize, who was endorsed by council. ANC secretary-general Fikile Mbalula ordered the PEC to reverse Mkhize’s appointment as it was against the party’s anticorruption policy.
ALSO READ: ANC at loggerheads over appointment of VBS accused
Additional reporting by Eric Naki.
