ON THE MONEY
STUART THEOBALD: VBS money trail to related parties is in a class of its own in banking collapses
In a first for modern South African banking history, VBS Mutual Bank may have committed the cardinal sin of lending money to its own directors and shareholders which it could not get back. A major portion of its balance sheet may have disappeared into the pockets of individuals related to the bank. Then the books were cooked to hide it. The curator appointed from SizweNtsalubaGobodo, Anoosh Rooplal, has been unable to confirm corporate deposits of R900m, out of the total deposit book of R2.9bn. He has found that VBS was paying "brokerage commissions" to attract deposits from municipalities. So, effectively, individuals were being paid to get municipalities to shift their deposits to VBS, despite municipalities being forbidden by the Municipal Finance Management Act to deposit money in mutual banks. This all emerges in an affidavit filed in late March by the registrar of banks as part of litigation launched by VBS’s majority shareholder, Vele Investments, to reverse the curatorship o...
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