VBS: ‘Cyril knew’

President Cyril Ramaphosa.
President Cyril Ramaphosa.

President Cyril Ramaphosa knew about the widespread looting at VBS Mutual Bank early last year, but allegedly failed to take any action.

City Press has learnt that Ramaphosa was informed of widespread corruption and looting involving bank executives at a meeting in Johannesburg very early last year.

Sources close to a major VBS shareholder said the shareholder personally informed Ramaphosa about what was going on.

“I know that the shareholder met with Ramaphosa, who was not president at the time. The shareholder briefed him about the outrageous corruption at VBS,” said a source.

Another said: “During the meeting, Cyril had apparently raised serious concerns about VBS. He promised to do something about it, but he didn’t do anything.”

We have no record of such a meeting
Khusela Diko, Ramaphosa’s spokesperson, said yesterday

The shareholder, whose name is known to City Press, began blowing the whistle from 2016 about what was going on at the bank. He declined to comment.

On Wednesday, Advocate Terry Motau SC released his damning report, The Great Bank Heist, into how 50 individuals and companies, including many of the bank’s executives, received “gratuitous payments” amounting to R1.8 billion from the bank.

Read: Full VBS 'Bank Heist' report: Who got what and what must happen

However, Ramaphosa was not the first person the shareholder went to for help.

City Press has learnt that in June 2016 – more than six months before he met with the then deputy president last year – the shareholder reported what he knew to the SA Reserve Bank and the then Financial Services Board (now the Financial Sector Conduct Authority, or FSCA).

Then, in about June last year, after meeting Ramaphosa, the shareholder appealed to a “former politician at Treasury, who facilitated a meeting between the Public Investment Corporation (PIC) and the whistle-blowing shareholders”.

“No action resulted from the PIC and the shareholder,” said another source.

Nobody was willing to do anything. Had they responded earlier, these guys would not have looted this much

The PIC has a 27% stake in VBS.

The report found that two of its former executives, Paul Magula and Ernest Nesane, who represented the PIC on the VBS board, were paid R7.6 million and R7.2 million, respectively, for their silence.

In September 2016, City Press reported that the whistle-blower asked the FSCA to investigate how VBS lent R136 million to Vele Investments, a company in which the bank’s former chairperson, Tshifhiwa Matodzi, and its former chief operating officer, Robert Madzonga, had undeclared interests at the time.

Vele subsequently became VBS’s main shareholder on the basis of a fictitious deposit, Motau found.

Read: VBS - The NPA gets involved

In the same report, City Press broke the news of how VBS lent R7.8 million to then president Jacob Zuma to cover his portion of the upgrades to his Nkandla home, in line with the report by former public protector Thuli Madonsela.

This week, sources said the loan to Zuma was an attempt to buy political insurance.

“Whenever other shareholders raised the issues at VBS, the bank’s executives would run to Zuma and tell him that they were under attack from shareholders because they had given him a loan.

The shareholders who were against looting at VBS had become the enemy of the state

Meanwhile, another shareholder, businessman David Mabilu, who has also been fighting corruption at VBS, said he was glad the report had vindicated him and others who were unhappy with how VBS was run.

“Let the law take its course,” he said this week. “This is what we have been calling for from day one.”

Motau’s report confirms a series of articles in City Press, run since February, which detailed the unfolding plunder that involved more than R1 billion in deposits by 15 municipalities.

Motau, assisted by Werksmans Attorneys, was appointed by the Reserve Bank to investigate after the bank was placed under curatorship in March, hours after City Press reported that VBS was bankrupt.

Read: VBS at risk of going bankrupt 

Motau found that the “payment of very large sums of money was made to the various perpetrators of the scheme of looting, as a reward for their participation, and substantial bribes were paid to certain of VBS’s directors and other related parties in order to buy their silence and to look the other way while the looting was going on”.


However, several people cited in Motau’s report have launched a series of individual court actions to challenge its findings.

Kabelo Matsepe, who allegedly acted as an agent to recruit municipalities and convince them to deposit funds at VBS, has hired experienced criminal lawyers BDK Attorneys to fight his case.

Matsepe’s company, Moshate Investment Group, denied all the allegations against him. His attorney, Mariq van der Westhuizen, said she planned to attack the constitutionality of Motau’s investigation.

“The inquiry offended various constitutional principles. This will become evident when we lodge the review application.

"We will illustrate that some of the evidence cannot be used or admitted as evidence,” she said, adding that Moshate had signed a contract with VBS and the company was paid accordingly.

Banks often contract agents to tout for business for them, and this “contract was nothing out of the ordinary,” she said.

Danny Msiza, the ANC’s Limpopo treasurer, whom the report accuses of placing political pressure on municipalities in the province to bank with VBS, hit out at Motau for injuring his reputation, dignity and family.

What Advocate Terry Motau did was to convict me in absentia and [he] left me to be castigated by the court of public opinion, as it is happening now
Danny Msiza, in a statement to City Press

“It goes without saying that my constitutional right to dignity has been seriously infringed. I have already instructed my lawyers to institute legal proceedings in the High Court to review and set aside portions of the report which improperly and falsely insinuate any wrongdoing on my part.”

Msiza said he had “voluntarily decided to submit myself to the authority of the ANC’s integrity commission”, which he will ask to “prioritise this matter”.

Sipho Malaba, a former partner at KPMG, which was VBS’s external auditor, is also expected to launch a court challenge to set aside the report which implicates him in fraud.

Malaba, who will be represented by Economic Freedom Fighters chairperson and senior counsel Advocate Dali Mpofu, is accused of not declaring more than R30 million of VBS loans he received.

The chartered accountant is also accused of signing off the bank’s financials when he knew that they were misstated by more than R700 million.

Read: VBS scandal - Limpopo ANC in trouble


A sombre mood prevailed in Thohoyandou, Limpopo, this week as news of Motau’s report spread.

Stunned clients said they hoped the bank could still be saved, but were reluctant to reveal their names because powerful figures such as Venda King Toni Mphephu Ramabulana were implicated.

A 63-year-old hawker from Manini village, who has been banking with VBS since 1990, said she “still cannot believe that the bank has been killed by educated people all because of greed”.

“We had put our hope in them, thinking that they will lead us well as VhaVenda, but it was not to be,” she said.

Ntanganedzeni Masidwali’s burial society deposited R116 000 with VBS. It has managed to recover R100 000 from Nedbank, which was appointed by the Reserve Bank to facilitate the payments to clients.

The stay-at-home mother of three does not hold out much hope for the recovery of the remaining R16 000.

“We were told that we would receive it after three years because VBS would, by that time, already have sorted out its issues and be rendering services again to its clients,” she said.

A 66-year-old pensioner said the Venda king and all others implicated should be dealt with.

No one is above the law. All these people who stole our money should account for their wrongdoings because they are not special
66-year-old pensioner

Ntsieni Mbulungeni, chairperson of the Thulamela Business Forum, said it was time those implicated “faced the consequences”.

“Also quite disheartening is the fact that they stole from the poor, and as the public, we never got to see how that benefited our people,” he said. 

“Closing VBS doors has already started disadvantaging local people. For instance, the majority of hawkers can no longer save money the way they used to and stokvels have also declined in numbers.” 

Read: How VBS Mutual Bank was plundered

– Additional reporting by Rolivhuwa Sadiki of Mkurukuru Media

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