VBS: Liquidators accept claims, Hawks say ‘arrests are imminent’

The claims of the South African Reserve Bank (SARB), the Public Investment Corporation (PIC), and most of the municipal depositors against the now-defunct VBS Mutual Bank in Limpopo have been accepted, the VBS liquidators said on Sunday.
A second meeting of VBS creditors took place before the Master at the High Court in Polokwane on Friday, the liquidators said in a statement.

Creditors’ claims against VBS

The meeting provided creditors an opportunity to present their claims against VBS in order for the claims to be scrutinised and accepted by the master. Resolutions giving the liquidator directions regarding the further winding-up of the estate were also submitted to a vote by the creditors.
VBS liquidator Anoosh Rooplal said in the statement he was pleased to see the bulk of creditors present their claims before the presiding officer on Friday.

“The majority of the municipality depositors who submitted claims and attended the meeting had their claims accepted. A total of 610 retail depositors, which included individuals, stokvels, attorney firms, and church groups and who had more than R100,000 invested at VBS also had their claims accepted, as did 17 VBS employees.
The South African Reserve Bank and the Public Investment Corporation claims were also accepted, among other corporate depositors. The resolutions were explained to the creditors and all of them were unanimously adopted by the creditors.
“This is a positive step for the liquidation, as it means that the proven creditors and the liquidator are aligned in terms of how the VBS estate is being wound up.”

Over the past months, the liquidator had succeeded in his civil claims to recover losses suffered by the bank. Final sequestration orders were granted on a number of former bank executives, including Tshifhiwa Matodzi, Mr and Mrs Ramavhunga, Phillipus Truter, Phopi Mukhodobwane, and Robert Madzonga.

“It is possible that criminal actions will be instituted by the relevant enforcement authorities against these former bank executives as well as other wrongdoers”, Rooplal said in his report to creditors.

Vele Investments was liquidated together with an additional 14 companies. Liquidation applications for an additional four companies would be heard on Monday.

‘The extent of fraud’ complicates matters

The respective trustees and liquidators appointed to the sequestrated estates and liquidated companies would follow a similar process of recovery. Successful recoveries in those estates would ultimately result in dividends being paid to the VBS estate. Rooplal emphasised that “the processes must run its course and due process must be followed. This will take time but I have taken the correct actions for the benefit of VBS creditors, bearing in mind that it is a mutual bank with many complexities”.
Due to the pervasive nature and extent of the fraud that was perpetrated against the bank, the accounting records did not fairly present the financial position of the bank. Rooplal noted in his report to creditors that certain financial information would therefore need to be restated in order to recover the correct amounts owed to the bank.
Engagement with various potential purchasers had been undertaken to sell the advances book and other assets of the bank. Various parties had made unsolicited offers to acquire the bank, but nothing concrete had presented itself. All unsolicited offers were required to demonstrate financial capability and compliance with basic checks and FICA requirements before any further discussion could take place.
Rooplal continued to pursue civil litigation against certain directors, management, and their related entities that were beneficiaries of the fraudulent scheme. The liquidator continued with collections efforts of all debt owing to the bank. In instances where the liquidator believed that there were reasonable prospects of success and which were likely to result in recoveries for the benefit of the creditors, legal proceedings had been instituted, the statement said.
Rooplal continued to cooperate with the relevant enforcement authorities who were investigating the criminal aspects.
The liquidation and distribution account would be distributed to the Master of the High Court when practically possible, but it was envisaged that this would take some time due to the sale of assets that must first occur.

“I went beyond my ordinary obligations to inform creditors of Friday’s meeting and made arrangements to assist retail creditors and employees with their claim forms. I am very pleased with the outcome of Friday’s meeting.
According to the Insolvency Act, I am now compelled to check all of the accepted claims against the records of the bank. If there are discrepancies, those claim amounts may be adjusted or certain claims may even be expunged if they are found to be invalid,” Rooplal said.

Those creditors who had not proven claims for whatever reason or whose claims were rejected by the master during the second meeting were requested to contact the liquidator’s team so that their claims could potentially be included in the liquidation process.
By African News Agency (ANA), editing by Jacques Keet