VBS looters must be held accountable

23 October 2018

Speaker,

It’s been called the greatest bank heist in South African history. And the sad thing is that it was perpetrated with the knowledge and active participation of the bank’s management and officials.

But the rot goes much deeper than this. These greedy individuals brought on board the municipal managers (MMs), chief financial officers (CFOs) and mayors of 15 municipalities.

They did this through bribery and pressure from senior government officials and other well-connected political figures. People like Danny Msiza, the Treasurer of the ANC in Limpopo, and Florence Radzilani, the Deputy Chairperson of the ANC in the same province. People like Brian Shivambu, the brother of EFF Chief Whip Floyd Shivambu.

94 VBS staff members have been retrenched. But they aren’t the guilty parties. No, the bloodsucking leeches and parasites that have fed off of the savings of some of our country’s poorest citizens must be held accountable.

Speaker, the VBS heist was blatant in its audacity, but completely unsophisticated in its implementation. It was little more than a giant pyramid scheme, which saw some R1.2 billion of municipal funds disappear, never to be seen again.

The consequences of this heist have been dire:

- The curator of VBS has indicated that it is unlikely that municipalities will get their deposits back. He initially suggested that they might get 10c on the rand. It now appears that this was optimistic and that they are unlikely to get anything at all.

- This means that these municipalities – which include some of the poorest and worst run in the country – will be unable to deliver the basic services that are their primary function. So once again, the residents lose out because of ANC mismanagement and corruption!

- In Fetakgomo/Greater Tubatse Municipality, for example, the municipality is in all likelihood not going to be able to pay the wages of municipal staff this month. Basic services such as water supply and the completion of hundreds of RDP houses are on hold because of the loss of some R245 million illegally invested in VBS.

- In Greater Giyani Municipality, where R161 million was illegally invested in VBS, the newly appointed municipal manager has indicated that there will be a long-term impact on service delivery.

- In the Vhembe District Municipality, Mayor Florence Radzilani and ANC Deputy Chair in Limpopo (who cried because her R300,000 “Christmas” from VBS wasn’t enough) admitted – she admitted – that the municipality had been doing business with VBS since 2014. They lost R311 million, which equates to a third of their annual operating revenue. And here’s the kicker: in July this year, she said that they “didn’t know of any regulation … that restricted the investment.”

Maybe she, and the other 14 mayors, MMs and CFOs, should try reading the Municipal Finance Management Act, because section 7(3)(b) specifically prohibits municipalities from opening accounts with mutual banks. Treasury even notified these municipalities that they were acting illegally, but they thought they knew better.

Every single one of the municipalities with deposits at VBS Mutual Bank is included in the 87 distressed and dysfunctional councils identified by Minister of Cooperative Governance and Traditional Affairs, Zweli Mkhize, earlier this year.

Two of them – Vhembe District Municipality in Limpopo and Madibeng in North West – received disclaimed audit opinions, essentially meaning their financial documents were so poor that the Auditor-General could not make a pronouncement on them. And what action has the Minister taken? None! Only one of the municipalities that lost money in the VBS Heist is under administration, and most do not have a financial recovery plan in place.

And lest we forget, there were others affected too: the 22,000 retail depositors who trusted their local bank with their life savings, only to see it plundered and used to fund the luxurious lifestyles of neo-Marxist, Gucci revolutionaries like certain members in this House. To buy helicopters and Lamborghinis. And Louis Vuitton luggage.

The retail depositors, at least, were protected up to R100,000 through Reserve Bank guarantees. Not so the stokvels and burial societies and small businesses who entrusted VBS with their finances – they won’t be getting their money back.

Speaker, it was only through questions from the Democratic Alliance that the illegal depositing of funds in VBS by municipalities was exposed. It has only been the DA that has called for the heads of those municipal officials and mayors involved in the scam. It is only the DA who has laid charges against those involved.

This is because it is only the DA that truly has the interests of all South Africans at heart. It is only the DA that is not motivated by politics of the stomach, but rather by a desire to truly uplift our country and create One South Africa for All who live in it.

The ANC should hang its head in shame – as should all those who have stood by and watched this outrageous theft without taking action.

Issued by Kevin Mileham, DA Shadow Minister of Cooperative Governance and Traditional Affairs, 23 October 2018