VBS and Altron had eye on mammoth R400m set-top box tender


Altron’s bid to force black technology company into business rescue turns ugly

VBS Mutual Bank was tipped to become the conduit for a R400 million tender to supply set-top boxes to government – one of several inroads the now-defunct and defrauded bank made into set-top box deals.

A presentation – of which City Press has a copy – to a prospective partner by JSE-listed technology group Altron pitched VBS as the channel for hundreds of millions of rands in payments from the Universal Service and Access Agency of South Africa (Usaasa).

This plan would have seen VBS provide Altron division Arrow Altech Distribution (AAD) with bank guarantees to procure knocked-down set-top box kits from French multinational SmartDTV.

AAD would have supplied these kits to black women-owned Thata uBeke Manufacturing (TUB), which would be paying AAD with VBS funding.

TUB would then have delivered completed boxes to the SA Post Office for distribution to poor households.

Altron and TUB are now locked in an unrelated court battle after Altron applied to put TUB into business rescue for unpaid debts.

TUB owner and chair Nana Sabelo says they rejected the VBS-Altron set-top box plan.

The structure seemed designed to remove all risk from AAD and leave TUB with a massive VBS debt, she told colleagues by email at the time.

This became moot as Usaasa cancelled the 2017 tranche of the set-top box tender.

Altron has, incidentally, previously had to fend off allegations that it was in talks with former president Jacob Zuma’s son Mxolisi to pay a R54 million bribe to secure some of the initial set-top box work in 2015.

Altron this week acknowledged the presentation, but said that VBS’s name and logo were simply there for illustrative purposes and that it “could have been” the logo of “any other bank”.

Altron says that it does no business with VBS whatsoever, but that VBS funded at least two of the 2015 winners of Usaasa tenders.

“VBS Mutual Bank was used to illustrate and explain the model as Altron Arrow was aware that the bank had funded Temic and Leratadima in the previous Usaasa tender,” said Altron spokesperson Zipporah Maubane.

Temic is Tshwane East Manufacturing Incubation Centre, which has received a R67.545 million contract from Usaasa for 500 000 antennae, while Leratadima Marketing previously won an Usaasa tender for 500 000 set-top boxes.

While Altron says that it had no dealing with VBS, City Press is also in possession of emails showing that AAD set up a meeting between its prospective partner TUB and VBS in August 2016, following a meeting between the two companies.

“Further to your meeting with us last week, Peter has asked that I arrange an introductory meeting with you and VBS Bank,” reads an email sent to TUB executives by the personal assistant to Peter Griffith, managing director of AAD.

Sabelo told City Press that TUB went to the meeting to see if VBS could possibly offer R40 million, the amount TUB was simultaneously asking of the Industrial Development Corporation (IDC). Instead, VBS wanted to extend a credit facility of R400 million, she claims.

It turns out this was one of two close shaves TUB had with VBS. It had also earlier, in 2015, offered TUB a R10 million loan, which the company rejected because it was “extremely expensive” and VBS wanted shares in TUB as security.


VBS was evidently going large in funding Usaasa tenders. Advocate Terry Motau’s recent Great Bank Heist report on the almost R2 billion stolen from VBS makes one passing reference to the Leratadima Usaasa contract.

VBS’s largest “contract finance” deal was a R250 million credit facility it gave to Leratadima, which Motau claims was “granted on the sole authority” of VBS CEO Andile Ramavhunga.

If VBS had funded the Altron plan, set-top box funding would have been its largest asset class.

As of May 2017, VBS had extended R137 million in credit to Leratadima, according to Motau’s report.

Usaasa told the parliamentary portfolio committee in a letter last month that it had been approached by VBS curator Anoosh Rooplal’s lawyers in August about the VBS facility.

Usaasa had written to VBS in 2015 to “confirm the availability of funding” for Leratadima, according to the letter, dated October 11.

As of January 2018, Leratadima had been paid R231 million by Usaasa, according to a parliamentary presentation the agency made in March this year.

The DA’s spokesperson for telecommunications, Marian Shinn, has lodged a complaint with the Public Protector, asking her to investigate the Usaasa tenders.

The Public Protector wrote back on October 19 saying she would investigate the matter.

The SA Reserve Bank this week applied to have VBS liquidated as there are no prospects of saving it.

Among the money liquidators will now pursue will be facilities tied to the Usaasa tenders.


Altron’s bid to put TUB into business rescue has turned into an ugly and protracted legal battle after initial papers were filed in May this year.

Separately from the set-top box proposal, TUB and AAD entered into a memorandum of understanding in November 2016 for AAD to supply TUB with components it needed for its armoured vehicle contracts.

TUB supplies high-tech parts for armoured vehicles and, like most companies in the South African defence industry, has hit tough times because of trouble at Denel as well as the bankruptcy of the major private manufacturer, Paramount Combat Systems.

TUB was particularly exposed to a Paramount contract to supply vehicles to Singapore.

This contract was put on hold last year.

Altron at some point took out an insurance policy with Santam to cover its exposure to trade debt with TUB.

In September 2017, things took a turn for the worse when TUB allegedly ran up an account of more than R30 million with AAD.

This led to Santam sending an independent business reviewer, Sandra Beswick, to assess the health of TUB.

Beswick painted a fairly grim picture, but also revealed that the R30 million threshold had been reached only because Altron had “ignored” an agreement it had reached with TUB about cutting back orders.

In November last year, TUB in turn lodged a grievance with AAD for allegedly overcharging it.

The companies agreed to have auditors look at their dealings and AAD ultimately offered to refund TUB slightly more than R2 million.

TUB nevertheless fell into arrears with AAD and in April this year signed a settlement agreement to repay R12.2 million.

Sabelo claims there were supposed to be further talks on the terms, but on May 15 TUB received a letter of demand from Santam, which had paid out the TUB debt to AAD.

On May 17, TUB sent a new payment proposal, but on May 23 a court application was made to place TUB under business rescue.

Sabelo claims this push was completely unreasonable since TUB has the written support of the IDC to cover at least some of the arrears, as well as a promising order book.

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