VBS Mutual Bank saga: Suspects to appear in court

The remaining seven suspects implicated in the VBS Mutual Bank looting scandal are set to appear before the Palm Ridge Specialised Commercial Crimes Court in Ekurhuleni on Thursday, 8 October 2020.

They are: Tshifhiwa Matodzi (bank’s former chairman), Andile Ramavhunga (former CEO), Phophi Mukhodobwane (former treasurer), Paul Magula and Ernest Nesane (former Public Investment Corporation executives), Avashoni Ramikosi (former police officer) and Sipho Malaba (former KPMG partner)

A report commissioned by the South African Reserve Bank (Sarb) found that 50 people unduly received payments from the bank. Matodzi is said to have received a whopping R325 million while accounts linked to Ramavhunga got more than R23 million.

Mukhodobwane received over R17 million and Malaba bagged a cool R29.2 million. In April, the group appeared in the dock for the matter and were subsequently granted R100 000 bail each.

The group had initially included the bank’s former Chief Financial Officer (CFO) Phillip Truter, who then opted to reach a deal with the National Prosecuting Authority (NPA). He received an effective seven years behind bars for his role in one of the most jaw-dropping looting sprees to ever emerge.

Together, they faced 50 charges of fraud, corruption, money laundering, contravention of the Prevention of Organised Crime Act and failure to submit a tax return.

VBS Bank saga: How it was all uncovered

In March 2018, the minister of finance was appointed bank’s curator, after a criminal complaint was laid.

“The complainant in this case formed an opinion in his then capacity as the Registrar that VBS Mutual Bank was in financial difficulties and as such would be unable to repay, deposits made with VBS, when legally obliged to do so”, the Hawks and NPA has said in a joint statement.

The scam was hatched on the 4 July 2017 when the board of directors for VBS approved financial statements for the year ending 31 March 2017 making VBS to look richer while it was in fact insolvent. The financial statements were shockingly inflated.

The allegations are that the Chairman and the Chief Executive Officer (CEO) signed the directors’ responsibility statement to the Annual Financial Statement that was prepared by the Chief Financial Officer (CFO) of VBS.

“The investigation has revealed that the ten men who are the suspects either unduly directly or indirectly benefitted at least R122 287 863 which was not due”