President Ramaphosa had known about the trouble at the bank since 2017, but consistently failed to act. His spokesperson Khusela Diko denied that the President had had a meeting with the executives of the bank, but sources told FWM that such a meeting had indeed taken place in Sandton although it was not listed as “official” at the time.
Ramabulana was elevated to the Venda kingship by former president Jacob Zuma, at the same time that Zuma secured a R7.8-million loan from VBS to pay off a debt after opposition parties submitted proof that Zuma had defrauded the state.
A 148-page report compiled by the South African Reserve Bank titled “The Great Bank Heist” repeats the word “fraud” at least 58 times, detailing the theft. The report stated that the tribal king and his legal advisor‚ Paul Makhavhu‚ “received vast sums of money for lending the support and influence of the royal family to VBS and Vele [Investments]”.
The Reserve Bank said that, despite all efforts, the first bank in South Africa to be 100 percent owned and managed by Africans, could not be saved as the gaping “hole” of hundreds of millions would present an unsurmountable problem for any future buyer.
Listed on the South African Stock Exchange in 2017, it ran into “liquidity problems” early in 2018, and was placed under curatorship only in March this year. The looting however continued unabated after the liquidity crunch was reported in the media. “Substantial bribes were paid to VBS’ directors and other related parties in order to buy their silence and to look the other way while the looting was going on,” the report stated.
But according to Makhavhu the king is innocent because “the people in the royal family are clueless as far as business is concerned”. Makhavhu himself certainly does not grasp the seriousness of the charges facing them. He has even tried to deny complicity and is quoted as saying in the report: “We didn’t have a single cent as the royal family. Not a single cent.”
He claims they only received “gifts” not cash.
Deputy President Cyril Ramaphosa pays a Courtesy visit to His Majesty, King Toni Mphephu Ramabulana at Dzanani in Nzhelele, Venda, Limpopo pic.twitter.com/SXKFFP76J3
— PresidencyZA (@PresidencyZA) November 4, 2017
But while Ramabulana and the bank’s executives were living the high life, flying in helicopters, driving Range Rovers and Mercedes-Benz’s, and shopping at exclusive boutiques, VBS Mutual Bank’s crash has paralysed already poor municipalities after it lost R1.5 billion of their funds.
Ruling ANC Party’s Cooperative Governance Minister Zweli Mkhize has meanwhile met representatives of 14 municipalities that invested their funds in VBS. The affected municipalities are located in the provinces of Limpopo, North West and Gauteng.
Documents obtained by South African daily City Press show how at least one municipal manager ordered his white subordinate to deposit R50 million into a VBS account within 30 minutes after the bank experienced its first “liquidity stress event” last year as a result of the looting.
Emails show how Romeo Mohaudi, the chief financial officer at West Rand District Municipality, pressured his counterpart from Merafong City Local Municipality, Thys Wienekus, to make the payment before noon on June 23 last year. Both municipalities Merafong and West Rand, had R50 million deposited in VBS, according to figures presented in Parliament during the Budget Debate by Treasury.
The “liquidity stress event” at VBS happened when the bank did not have cash to settle transactions with other banks, coming up R295 million short. The previous day, South African Rand Merchant Bank filed a final written demand after which it launched a legal challenge against VBS.
The bank was already busy collapsing under the weight of hundreds of millions of rands in unpaid overdrafts, vehicle finance deals, mortgage bonds and intercompany loans between VBS, Vele Investments and various other Vele companies. The report noted that “criminal charges should stem from evidence of fraud, corruption and bribery perpetrated by the bank’s leadership and public officials with whom they were in cahoots”.
A South African Reserve Bank employee told FWM that the bank’s 20 biggest creditors were related and linked to the businesses run by Venda tribe leaders and their families. “They thought they were starring in Muvhango,” the source said. Muvhango is an extremely popular black South African television series, a drama based on the lives of a fictitious Venda tribal king and his family and their businesses.
The real life actors in the bank heist used depositors’ money to fund Vele Investment’s expansion. “There are basically three ways in which the bank’s money vanished,” the source explained.
“The [Venda] clan never repaid their home loans, overdrafts or vehicle loans. And also Vele’s subsidiaries ran their day-to-day business through large VBS overdraft facilities and intercompany loans. It was a giant Ponzi scheme actually.” The Ponzi scheme collapsed because its owners – citing their tribal closeness to the President – simply stole the cash which the bribed government and local government officials had deposited in the operation.
A R10 million bribe went to Brian Shivambu, younger brother of the anti-white Economic Freedom Fighter senior politician Floyd Shivambu. Transferring funds to family members of politicians is common in South Africa, because it is the easiest way to avoid tax enquiries launched by small white opposition parties such as the DA or the Freedom Front Plus.
Firebrand Shivambu, who regularly tells his constituents how “racist” whites are, was one of various public officials who were “in a position to influence the making of such deposits” the report underscored.
Shivambu, the EFF’s Chief Whip, recently riled against “racist Afrikaner kids” travelling all over the world, telling people about a white genocide that plagues them in South Africa. According to Shivambu, by informing the international public, Afrikaners “are threatening us with war, [and] we are ready”.