Johannesburg - The bank that came to the rescue of President Jacob Zuma – by granting him a loan to repay his R7.8 million Nkandla debt – now faces a possible probe from the Financial Services Board relating to a R136 million loan it is said to have given to a company in which its chairperson and chief operating officer (COO) have an interest.The loan was for a 54% stake in fuel company Afric Oil. A dossier, sent to the board by a whistle-blower – which City Press has also received – reveals that in the last financial year, Venda Building Society (VBS) Mutual Bank allegedly loaned R136 million to Vele Investments, a company in which the bank’s chairperson, Tshifhiwa Matodzi, and its COO, Robert Madzonga, have undeclared interests. According to the whistle-blower, Matodzi and Madzonga did not declare their interests in Vele to VBS, and the loan to their company was not approved by the bank’s board. On Friday the Financial Services Board’s (FSB) spokesperson, Tembisa Marele, said: “The matter was received through the whistle-blowing system and will be processed like any other whistle-blowing matter. “At the end of this process, a determination will be made as to whether the Financial Services Board has any jurisdiction to investigate the matter.”City Press understands the matter has also been brought to the attention of the SA Reserve Bank. However, the central bank had not responded at the time of going to press. The Reserve Bank and FSB have regulatory oversight in the banking and financial services sectors, with the former having direct powers over banks. The dossier paints a picture of an open season at the bank, with banking executives flouting lending and recruitment policies and regulations, and using depositors’ money to finance birthday bashes. However, VBS has denied giving a loan to Vele.Suspicious intent The dossier bears the name of Dyambeu Investments, which holds a 26% stake in VBS. Among others, Dyambeu is co-owned by construction magnate David Mabilu and vhaVenda King Mphephu Ramabulana. Mabilu refused to comment and Ramabulana’s spokesperson said the king would not speak on matters related to the bank. The little known VBS shot to national prominence six weeks ago when City Press revealed that it was processing a loan application from Zuma for the R7.8 million he needs to pay for the Nkandla security upgrades.VBS’ decision to finance Zuma’s debt came two weeks after the courts barred the president from crowning Ramabulana as King. This followed a court application by Ramabulana’s niece, Princess Masindi Mphephu, to stop the coronation. Masindi claims that she is the rightful heir to the throne. The coincidence between the bank’s decision to finance Zuma’s loan and the president’s decision to crown King Ramabulana has raised speculation that the loan is linked to the fights over the vhaVenda dynasty.On Friday Mbulaheni Mphephu, a member of the vhaVenda royal family, told News24 that he questions the timing of Zuma’s loan and his decision to crown King Ramabulana. “It [the court battle over his kingship] is ready to go to trial. Then all of a sudden this year we heard that Zuma would coronate Ramabulana. It did not make sense to us. Why? Surely he would wait for the case to be heard first? It was just a few months. Why would you coronate the king when a trial date has been set, then followed by the pronouncement of the loan?” said Mphephu.The King’s spokesperson Chief Livhuwani Matsila dismissed this saying “silly and childish allegations around this issue do not deserve the King’s response.”He said the King Ramabulana would not comment on the loan issue as “VBS management is the only competent and responsible authority to can provide clarity on loans.” Conflict of interest According to the dossier there was no evidence in the possession of VBS to show that Matodzi had an interest in Vele, something he would have had to do as a senior officer of the bank. “The approved loans were made contrary to the prescribed policies and procedures adopted by VBS when considering applications for loans and advances. In particular, the granting of this loan, considering the quantum thereof, has never served before the board for approval,” the dossier says. Of Madzonga, the document says “to the date of the writing of this report, Madzonga remains an active director and chairperson of Vele. The same Vele which has an approved loan from VBS. The conflict of interest is glaring,” said the dossier. Attached to the complaint is Companies and Intellectual Property Commission search retrieved last week which reveals that both Matodzi and Madzonga are active directors of Vele Investments.Further, the document reveals that the loan approved to Vele was meant for acquiring a 54% stake in fuel group Afric Oil, which is owned by the Pembani Group. Pembani’s chief executive officer Kennedy Bungane refused to comment about the company’s discussions with Vele or any other party. The whistle-blower also complains about the employment of Madzonga, a former MTN corporate services executive, as VBS’ chief operating officer, saying he was scandalous.During his time at MTN Madzonga was implicated in the ICT Indaba scandal that led to Public Protector finding against Communications Minister Dina Pule and led to her sacking. The complaint says: “Madzonga has made newspaper headlines for being under investigations by the Hawks for his role in the alleged fraud and corruption relating to an ICT Indaba Conference. Madzonga was suspended from MTN as it corporate Services Executive pending an internal investigation into allegations of misconduct and irregularities. His suspension was upheld by the Labour Court.”He eventually left MTN. The document also argues that Madzonga’s appointment as COO was never approved by the VBS board and that even the bank’s human resources committee learned about his appointment through the media. The complainant also questioned why VBS, which declared a R4.9 million profit in the last financial year, was able to finance Venda King Mphephu Ramabulana’s birthday. Ramabulana’s lavish birthday was held over several days in Venda last month. VBS Responds Speaking on behalf of the bank, Matodzi and Madzonga, Ndivhuwo Khangale denied that VBS had approved a R136 million loan to Vele.“VBS has never received an application for a loan from Vele for the stake in Afric Oil”.He would neither confirm nor deny that both Matodzi and Madzonga are directors of Vele. “VBS can only respond to issues pertaining to its own business”. Without answering directly if Matodzi and Madzonga had declared their interests, he said: “Board members generally declare their interests in every sitting”.Khangale said Madzonga was rightfully employed by the bank’s chief executive Andile Ramavhunga and the human resources committee. Asked if the bank had considered Madzonga’s chequered MTN past, he said “when filling vacancies, the bank applies its standard screening process which is not based on allegations in media and other public platforms, but independently verified facts”.He also denied that the bank had financed King Ramabulana’s birthday.