VBS scandal goes global

This story was amended after its initial publication to reflect comments received from Alvaro Sobrinho after City Press had gone to print.

The VBS Mutual Bank scandal has gone global after controversial and politically connected Angolan banker and millionaire Álvaro Sobrinho lost his R144m investment in the bank.

The deal with Sobrinho – a business partner of former Angolan president José Eduardo dos Santos’ daughter, and who owns a bank and a football club in Portugal – was allegedly brokered by ANC Limpopo provincial treasurer Danny Msiza and young businessperson Kabelo Matsepe.

It was discussed in London and Venda King Toni Mphephu accompanied Msiza and Matsepe in July last year in a delegation that also included Mphephu’s adviser Paul Makhavhu, former VBS chief executive Andile Ramavhunga and Tshifhiwa Matodzi, the chairperson of VBS’ owner, the now-liquidated Vele Investments.

This revelation is contained in the transcript of Ramavhunga’s interrogation by a panel chaired by advocate Terry Motau, which was given to the forensic investigators working on the case.

A spokesman for Sobrinho, James Knight, confirmed the deposit of $10 million as well as the negotiations to establish a joint venture. He told City Press that Sobrinho is “still pursuing the return of funds”, but not from VBS. Instead they want the money back from the man Knight says brokered the deal: Pretoria lawyer Joseph Maluleke of Rooth Wessels Attorneys.

According to Knight, Sobrinho did meet both Msiza and Matsepe, but only “briefly” as part of the negotiations.

The transcript contains further insight into the high life of VBS’s executives. They include that:

• Ramavhunga and Matsepe, who brokered business for the bank, were friends who planned at least one holiday to Dubai for themselves and partners. They also shared a love for sneakers, and Matsepe frequently sent Ramavhunga pictures of high-end Nikes; Ramavhunga asked him to buy him pairs in size UK8; and

• Ramavhunga, who has other business dealings with Matsepe, borrowed R750 000 from him last year to make a payment to his ex-wife. He had repaid only R100 000 of this when he lost his job at VBS.

Msiza did not respond to requests for comment. Matsepe declined to comment, saying his lawyers had advised against it.

The King’s bling

City Press has obtained copies of four vehicle-financing loans Mphephu entered into with VBS, for luxury cars worth R6.8m. This contradicts his earlier claim that he believed the cars were gifts.

The first was for the 2015 purchase of a Range Rover 5-litre V8 for R2.488m which had repayment installments set at almost R53 000 a month over 60 months. The second was for the 2016 purchase of a BMW 760i for R2.1m, with monthly repayments of almost R41 000 over 72 months.

The king also bought a Mercedes-Benz Viano that same year for R868 814 with monthly repayments of R17 000.

His final car purchase was another Viano, in January this year, for R1.35m with repayments of more than R27 000 over 72 months.

The king’s office confirmed the London trip yesterday, but said he travelled only once the investment was concluded and after payment had been made to VBS.

He confirmed he had bought the cars, saying there were purchasing agreements in place and that payments had been made as agreed.

The Angolan connection

Meanwhile, Sobrinho faces new accusations this year that he pillaged the Banco Económico Santo Angola (Besa), which he ran for a decade, in a way that resembles the alleged fraud that sank VBS.

The difference is scale: Sobrinho is accused of extracting $615m or R8bn for himself and associates including Dos Santos’ daughter, Tchizé. The bank subsequently collapsed and required a state bailout.

During his interrogation, Ramavhunga said Sobrinho was planning to go into business with Vele and create a trade finance joint venture under VBS. The R144m was meant to grow to R500m in “seed funding”. At the time it was easily the largest deposit VBS would have received. In addition, Sobrinho was planning a direct investment in Vele, said Ramavhunga.

When the bank began going under, the VBS bosses were particularly panicky about Sobrinho’s millions.

On the day VBS was placed under curatorship in March, Matsepe apparently sent Ramavhunga a panicky WhatsApp message, saying: “Please let’s not loose [sic] to the 140.”

This was followed by: “Don’t want to give back the 140 to Setlafusion.”

Setlafusion is a local shelf company through which Sobrinho was investing the money. Its sole director is Joseph Maluleke, a Pretoria attorney who is also a director of Alvaro Sobrinho Africa (ASA), an investment bank Sobrinho established in Mauritius.

At one point during the interrogation, advocate Ross Hutton asks Ramavhunga if the R144m is stuck at VBS like the R1.5bn in municipal deposits.

“They, like the municipalities, are sitting with what looks like an irrecoverable debt?” Hutton asks.

“Yes,” Ramavhunga replies.

According to Knight, Sobrinho had however already demanded his money back in October 2017.  

“Given the joint venture did not move forward, the formal request for return of funds was sent in October 2017 to Joseph Malukeke, R&W Attorneys and First National Bank,” he said.

Asked about Ramavhunga’s testimony that the money was effectively lost in VBS, Knight said “we won’t comment on statements of others”. Sobrinho still expects Maluleke to repay the money, he added.

Matsepe and Msiza

The Ramavhunga transcript is dominated by questions about his dealings with Matsepe, whose Mashate Investments was paid at least R12.5m in fees for procuring deposits for VBS. In the transcript Hutton suggests this was closer to R25m.

Investigators cite reams of WhatsApp messages between Ramavhunga and the man he called “General”.

Matsepe appears to have acted as a conduit for Msiza, or at least constantly claimed to be doing so repeatedly contacting Ramavhunga to relay things “Danny” said.

Hutton asked Ramavhunga what Msiza had to do with the Sobrinho deal. Ramavhunga answered that Msiza “is the one who introduced ASA to Joseph [Maluleke]”.

Asked who would have earned the commission on the R144m deposit, Ramavhunga said it was “probably” Matsepe.

“You need to remember that he got this from Bra Danny, so I would not know what happens in the background,” Ramavhunga said.

Other WhatsApps in the investigators’ possession appear to show that when the Treasury told municipalities they could not deposit money in a mutual bank and VBS started its downward spiral, Matsepe dropped more names.

One message from Matsepe to Ramavhunga reads: “Danny says you must call Supra and ask to meet. Supra will be around Johannesburg tomorrow. He says we must explain to him what is happening with this Treasury thing.”

Ramavhunga told the panel Matsepe accompanied him to the World Economic Forum in Davos last year because “he has a relationship with Malusi Gigaba, who I wanted to meet”.

Matsepe, Ramavhunga claimed, also allegedly “hijacked” the deal that would’ve saved VBS: procuring a R1bn deposit from Prasa.

And after one unnamed municipal manager contacted Matsepe to complain that VBS was not helping him with a loan to buy a property, Matsepe forwarded the message to Ramavhunga, adding: “We can’t have an MM [a municipal manager] desperate like this, CEO.”

Who paid who

Ramavhunga also sent VBS business in the direction of another friend – Mauwane Kotane. Kotane’s Mamepe Capital was a middleman in one of the earliest VBS controversies – a R200m investment from the Namibian SME Bank which went into VBS accounts, but then seemingly disappeared. SME is now in liquidation and Namibian investigators are still trying to find this money.

And, while VBS was paying Mamepe, Mamepe paid Ramavhunga almost R2m through his consulting firm Ramavhunga Consulting. He then in turn gave Mamepe VBS business.

According to the transcript, Ramavhunga and Kotane were old school friends. Asked if this relationship was a conflict of interest, Ramavhunga told investigators “that’s a difficult one. Yes okay, I’ll take it.”

Sobrinho’s alleged megafraud

Sobrinho was chief executive of Besa from 2001 to 2012. The bank collapsed in 2014 when giant holes were discovered in its balance sheet.

In March, European Investigative Collaborations, an alliance of investigative journalists at major European newspapers, published an exposé with new evidence that Sobrinho contributed to this collapse by pillaging the bank.

As with VBS, it was allegedly done by fabricating loans and deposits in favour of a web of related companies. The report found payments totalling $615m to companies owned by Sobrinho, his family and also Tchizé dos Santos.

Knight said that the allegations are “wholly defamatory and without factual basis”. Investigations predating the latest allegations had cleared Sobrinho of wrongdoing, he said.

After resigning from Besa, Sobrinho launched a spectacular international business career. He owns property around the world, his own bank and a football club called Sporting CP in Portugal and, more recently, set up shop in Mauritius where the government allegedly bent over backwards to let him register his investment bank named after himself: Alvaro Sobrinho Africa.

Sobrinho promotes himself as a forward-thinking philanthropist.

His charity, the Planet Earth Institute, was recently the reason Mauritian president Ameenah Gurib-Fakim resigned after she went on an international shopping spree using a credit card given to her by the charity.

Sobrinho apparently set up a number of companies in South Africa in addition to Setlafusion last year, with Maluleke apparently acting as his local representative.

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