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

2018-07-24 05:28

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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.

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