This, after the recent arrest of former Merafong Municipality employee Mattheys Wienekus in relation to R50 million that was unlawfully invested with the bank. At least 20 municipalities across the country, including four in the North West, lost billions through their investment in the bank. Municipalities in the North West invested more than R314 million of taxpayers’ money with the now liquidated bank. 

A report titled "The Great Bank Heist" by advocate Terry Motau, illustrated how billions were looted from the bank and how municipalities’ investments with the bank were contrary to the Municipal Financial Management Act (MFMA) as VBS Mutual Bank was not registered as a bank in terms of the Banks Act.

It was found that the Madibeng Local Municipality invested R31 million of their conditional grant, the Dr Ruth Segomotsi Mompati District Municipality invested R150 million, the Moretele Local Municipality invested R50 million from their water services infrastructure grant and the Mahikeng Municipality, invested over R83 million.

The latest Auditor General report presented before the National Council of Provinces (NCOP) earlier this week on local government once again highlighted that the loss resulting from investments with the VBS Mutual Bank significantly weakened the financial position of municipalities in the North West and had an impact on the delivery of infrastructure and maintenance projects.

Deputy Auditor-General Tsakane Ratsela said the financial health of the province has deteriorated over the years, with more than 80% of municipalities in the province now in a dire financial state.

Meanwhile, nine suspects are now facing criminal charges for their alleged role in the collapse of the bank. Hawks spokesperson, Hangwani Mulaudzi, recently announced that the suspects face several charges racketeering in contravention of the prevention of organised crime Act 121 of 1998, (POCA), twelve (12) counts of theft, seven (7) counts of fraud, fifteen (15) counts of corruption in contravention of the Prevention and Combatting of Corrupt Activities Act 12 of 2004, and seven (7) counts of money laundering (POCA). 

EFF leader Julius Malema earlier this week during a media briefing denied any involvement in the looting of the bank and stated that he would resign should he be found guilty of any allegations levelled against him and his party.  Malema and his deputy Floyd Shivambu have for several years been questioned on their alleged involvement with VBS.

OFM News