Deputy finance minister Mondli Gungubele has warned ANC MPs against pushing for a taxpayer-funded recapitalisation of VBS Mutual Bank, reports the Sunday Times.<\/p>\n
Speaking at a closed ANC parliamentary caucus meeting on Thursday (19 October), Gungubele said that a bailout for the bank would embolden other potential fraudsters and send a message that ‘criminals can steal’.<\/p>\n
Deputy communications minister Pinky Kekana and labour committee chair Lemias Mashile are said to support the idea of offering a bailout to VBS, while Yunus Carrim, chair of the finance committee, said earlier in the week that the bank should be saved.<\/p>\n
The Sunday Times reports that finance minister Tito Mboweni and Reserve Bank governor Lesetja Kganyago are also set to be called to a meeting about VBS’ future with the standing committee on public accounts.<\/p>\n
While Gungubele declined to discuss the caucus meeting, he said that Treasury was not swayed by calls to provide a financial rescue package for VBS in the way that it did with African Bank in 2016.<\/p>\n
“What costs were incurred by government on the African Bank situation? It\u2019s zero. But on the VBS it is R336 million,” he said<\/p>\n
“African Bank was solvent and VBS is insolvent,” he said.<\/p>\n
“The source of the problem of African Bank was an unsustainable business model. If you go to the VBS, the source of the problem is fraud.”<\/p>\n
Gungubele said that a final decision on whether to wind up VBS would be taken once the liquidation process was concluded.<\/p>\n