‘Great bank heist’ sees $130mn plundered in South Africa

Bloomberg

A probe into the failure of VBS Mutual Bank found that at least 53 people and companies may have benefited from the looting of 1.9 billion rand ($130 million) from the South African lender before its collapse.
Investigator Terry Motau, who was appointed by the central bank to lead the inquiry, is calling for arrests to be made and for tax authorities to swoop on those identified in his 139-page report, titled “The Great Bank Heist.”
He also recommends that VBS be wound up and an auditor’s liability claim be brought against the company’s accountants, KPMG South Africa.
“There is no prospect of saving VBS,” Motau said in the report, which was posted on the central bank’s website. “It is corrupt and rotten to the core. Indeed, there is hardly a person in its employ in any position of authority who is not, in some way or other, complicit.”
While VBS’s collapse didn’t destabilise the country’s financial system, it exposes wrongdoing by politically connected individuals who went on spending sprees buying luxury cars and charting helicopter flights with the savings of almost 23,000 retail depositors. Motau’s report detailed a bank that issued payments to individuals in exchange for massive deposits from state entities and municipalities, which are at risk of losing the money they parked with VBS even though most retail deposits are safe.
Before being taken over by an administrator in March, the bank caught public attention in 2016 when it gave former President Jacob Zuma a mortgage to settle a Constitutional Court order to repay taxpayers some of the money spent upgrading his private residence. According to the report, Andile Ramavh-unga, former chief executive officer of VBS, said he oversaw the payment of 1.5 million rand to what he called the Dudu Myeni Foundation in order to secure a 1 billion rand deposit from a state-owned rail agency.
No foundation with this name existed and it may have been a reference to Zuma’s own foundation, which is chaired by Myeni, Motau alleged. Myeni, was ousted as chairwoman of South African Airways last year, having served on the board of the unprofitable airline in various capacities since 2009.