Bank statements seen by the City Press show that while VBS Mutual Bank lost R1.5 billion of municipalities’ money, some of its executives were drawing millions to pay for luxury lifestyles.
In a new report, the paper said that it had seen evidence that executives, including the bank’s chairman and Vhavenda King Toni Mphephu Ramabulana, were living it up on the bank’s dime.
This included having loans for many luxury vehicles, private helicopters, and shopping sprees at stores like Armani. There were also loans for homes in upper-class suburbs, and access to overdrafts in the millions.
According to the City Press, the plundering was achieved through complex inter-company loans, where funds were transferred to accounts belonging to the bank’s shareholder companies – most prominently, Vele Investments – which were then apparently used to keep other subsidiaries going, and pay salaries to executives.
VBS was placed under curatorship by the Reserve Bank earlier this year, after it came to light that it would be unable to pay depositors their money.
The KPMG auditors who signed off on the bank’s financials were also found to have loans with the bank. These auditors resigned from the group ahead of possible disciplinary action in April.
An executive from Vele admitted to the City Press that processes weren’t followed in attaining the money, but denied that it was ‘stolen’, rather saying that it was a bona fide loan that would have to be repaid.
You can read the full story in the City Press for 24 June 2018