VBS Mutual Bank new arrests: Hawks swoop on municipal officials

Three former senior municipal officials have been arrested on charges related to the VBS Mutual Bank looting case.

Hawks spokesperson, Katlego Mogale, said that the Hawks’ Serious Corruption Investigation Unit members had arrested a former municipal manager, 60, from the West Rand District Municipality, a former chief financial officer, 37, from the West Rand District Municipality, who is now acting municipal manager in the Merafong Local Municipality, as well as a former manager, 34, from the West Rand District Municipality, in several locations in Gauteng. 

“The arrest is based on the ongoing investigation of maladministration and corruption in the looting of the VBS Mutual Bank. The trio will be appearing tomorrow, 29 June 2021 in the Pretoria Specialised Commercial Crimes court,” Mogale said.

“The allegations relate to investments into VBS Mutual Bank (VBS) made by municipalities. The investments made by the municipalities into VBS are reported to have been done in contravention of the provisions of the Municipal Finance Management Act by investing municipal funds with a mutual bank,” Mogale said.

During the arrests, a search and seizure operation was also conducted in order to confiscate IT equipment, which could contain pertinent documentation and/or articles relating to the investigation.

The National Head of the Directorate for Priority Crime Investigation, Lieutenant General, Godfrey Lebeya, has previously indicated that following the arrests and securing of court attendance of the main players in the VBS investigation, arrests within municipalities would follow.

A total of twenty municipalities deposited R3,7 billion with the mutual bank, of which R2,2 billion has been repaid, while the losses amounted to R1,5 billion. 

“Some of the lost funds amounting to R67 million were allegedly paid as brokerage commissions to entities and/or individuals to attract more deposits mainly from municipalities.  This nationwide investigation has revealed that VBS employees, municipal executives and other officials received gratifications for the investments made,” Mogale added.