VBS heads to court to place Madzonga's estate under provisional sequestration

2018-07-24 05:28

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

As VBS Mutual Bank tries to rebuild following its financial crash allegedly due to mass-scale fraud, it will take Robert Madzonga to court in an attempt to have his estate placed under provisional sequestration.

The bank has targeted Madzonga, who is the former CEO of Vele Investments, the bank's main shareholder, after he allegedly dipped into hundreds of millions of rands in funds belonging to depositors of the bank to finance his lifestyle.

According to bank statements obtained by City Press, Madzonga enjoyed an after-tax monthly income of R400 000 and a travel allowance of R100 000 a month.

He received a further R15m from VBS. This was first transferred to Vele, then to another company and finally deposited into Madzonga's account. This money was used to pay for six of his cars, which are worth more than R6m; his R213 000 monthly bond; and occasional dinners at Gianni's Ristorante, an up-market seafood eatery in Ballito, KwaZulu-Natal, City Press reported.

Madzonga's cars and property are all financed by VBS.

According to the Sunday newspaper, VhaVenda King Toni Mphephu Ramabulana and Tshifhiwa Matodzi have also been implicated and the splurge took place while Andile Ramavhunga was the chief executive of VBS.

Ongoing investigation

Earlier this month, the bank's curator, Anoosh Rooplal, said the bank would have to recover around R1.5bn for any hope that it can be saved. He also said a retrenchment process had been instituted at the bank because of the dire state the mutual bank was in.

He added that since becoming the curator and discovering the sheer scale of fraud at the bank, he had become less confident about the possibility of restoring the bank.

South African Reserve Bank (SARB) governor Lesetja Kganyago announced that the investigation into alleged wide-scale fraud at VBS was ongoing and is expected to be concluded by September this year.

"Initial findings of the investigation were made available to the curator by the SARB. The curator has used these preliminary findings from the investigation to launch urgent applications to take steps to recover monies owed to VBS," said Kganyago.

He said that once the investigation had been completed, SARB would then hand over the evidence to authorities for possible criminal charges.

SARB announced earlier this year that VBS would be placed under curatorship as the mutual bank was facing a liquidity crisis.

The application for provisional sequestration will be heard in the South Gauteng High Court on Tuesday.

KEEP UPDATED on the latest news by subscribing to our FREE newsletter.

- FOLLOW News24 on Twitter

Read more on:    vbs

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.
NEXT ON NEWS24X

Inside News24

 
/News
 

And the Paws24 and Hill's winners are ...

Find out who the winners of our Paws24 pet pics and Q&a competitions are...

 

Paws

Keep your family and pets safe from rabies
5 scientific benefits of owning a cat
Why we love cats
8 great natural remedies for your pet
Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.