53 people exposed in South Africa’s great bank heist – full report

A forensic investigation into the mass looting of VBS Mutual Bank has been completed, with investigators effectively finding that there is no way for the bank to be saved.

The report was published by the South African Reserve Bank on Wednesday, where it was found that close to R2 billion had been looted from the bank by over 50 individuals.

Advocate Terry Motau, who led the investigation, said that about R1.89 billion was “gratuitously” taken from VBS by 53 people between 1 March 2015 to 17 June 2018.

The individuals include many of the top executives at the bank and other related parties.

“It was not possible, in the course of the interviews, to obtain a clear picture of the precise amount that has been looted from VBS by its captors,” the Motau said.

“Indeed, that is something that the curator will need to ascertain accurately when he completes a full restatement of VBS’ financial position. Nor was I able to ascertain, with precision, the amounts that every participant in the looting received. To a great extent, I have been limited by what the various interviewees confessed to.”

VBS was placed under curatorship on 11 March 2018 against a backdrop of a serious liquidity crisis at the mutual bank. The initial findings of the curator revealed significant financial losses in VBS, which prompted the decision to institute a forensic investigation.

It was alleged that VBS executives, and those of Vele Investments had made a host of dodgy transactions to inflate the bank’s books. This included accusations of creating fake deposits, which executives then withdrew to fund other business opportunities and lavish lifestyles.

The primary objectives of the forensic investigation were to establish whether:

  • Any of VBS’s business was conducted with the intent to defraud depositors and/or any other creditors of the mutual bank, or for any other fraudulent purpose;
  • VBS’s business conduct involved any questionable and/or reckless business practices and/or material non-disclosure, with or without the intent to defraud depositors and/or any other creditors; and
  • There had been any irregular conduct by VBS’s shareholders, directors, executive management, staff, stakeholders and/or related parties;

The report found there to be widespread corruption at the bank, with no real prospect of saving it.

“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,” the investigators said.

While the final report effectively names all the parties that received the looted monies from VBS, the SARB stressed that it was not indication of guilt or innocence, but rather should be used by the relevant authorities in further investigations.

However, it was recommended that criminal proceedings be initiated against those implicated.

“The investigation has revealed a wide range of criminality in the conduct of the affairs of VBS. That is also so in regard to Vele. Indeed, it emerges very clearly that VBS and Vele have been operated as a single criminal enterprise, with Matodzi firmly at the helm,” the investigators said.

Many of those implicated in the report are chartered accountants and attorneys, the investigators said, adding they they should face further action from their respective governing bodies on top of criminal proceedings.

The full report can be read below:

VBS Mutual Bank – The Great Bank Heist by BusinessTech on Scribd

Read: VBS CEO says he knew nothing about R1.5 billion that was looted under his nose: report

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53 people exposed in South Africa’s great bank heist – full report