VBS’ R1bn gamble: We were counting on Dlamini-Zuma to win

VBS Mutual Bank's CEO, Andile Ramavhunga.Photo by Lucky Morajane
VBS Mutual Bank's CEO, Andile Ramavhunga.Photo by Lucky Morajane

A make-or-break deposit of R1 billion from the Passenger Rail Agency of SA into VBS Mutual Bank fell through because the Nkosazana Dlamini-Zuma camp lost at the ANC’s December elective conference, according to VBS treasurer Phophi Mukhodobwane.

A transcript of Mukhodobwane’s interrogation by forensic investigators, which City Press has a copy of, reveals the intense lobbying around the Prasa money which could have staved off the collapse of the bank.

It would also have involved bribes so expensive that the deposit would have ultimately caused VBS more losses.

Another set of transcripts in City Press’ possession – of VBS chief executive Andile Ramavhunga’s interrogation – reveals that the plan was to get an additional R2 billion out of Prasa only a month later.

“Initially I know there were some union members who were involved in the transaction, where it hinged on the outcome of the ANC electoral partners,” Mukhodobwane told the investigation led by Advocate Terry Motau in May this year.

“These were politicians who were on what we called the NDZ side,” he said.

These politicians were supposed to get a cut of the R1.5 million “commission” VBS paid in relation to the Prasa money.

After the Zuma faction lost, another set of politicians had to be approached, Mukhodobwane said.

The deposit ultimately never materialised.

“It was paid because the camp at the time was the one that was pushing for the R1 billion to be invested in VBS,” said Mukhodobwane.

The man who directly received the R1.5 million commission was Gift Manyanga, according to bank statements now before court.

According to Mukhodobwane, “Manyanga himself told me that the outcome of the December elections were unexpected and that’s why it didn’t happen”.

There was a veritable feeding frenzy around the Prasa deal with middlemen competing for the commission. One of VBS’ known deposit-raising agents, Kabelo Matsepe apparently entered the fray and “hijacked” the deal from Manyanga, according to the Ramavhunga transcripts.

There were ultimately “too many people in the pot”, said Mukhodobwane.

Expensive money

The deal VBS was offering Prasa and the agents show how desperate things had gotten at the bank by then.

They offered Prasa an interest rate of 9.25% on the R1 billion and were going to have to pay an additional 4% to the agents, said Mukhodobwane.

That was effectively an interest rate of 13.25% which VBS could not afford to pay anyway.

According to Mukhodobwane, there were internal fights at VBS and some executives felt that the Prasa interest rate would have to be cut down in order to accommodate the payments to middlemen.

Prasa alone would have involved paying fixers and facilitators R40 million – more than VBS had up to then spent on all such payments to agents from 2016, when he joined the bank, according to the transcript.

According to him, the fees paid to agents like Matsepe would be shared with municipal officials as inducement to put money in VBS.

This often led to fights.

In one instance officials at Polokwane were angry because the agent got R1 million, but the municipal officials got a “can of Coke”.

Asked by investigator Advocate Ross Hutton whether this was a “metaphorical can of Coke”, Mukhodobwane replied: “No, that was really a can of Coke, apparently.”

Mukhodobwane’s evidence reveals more details about the extent to which VBS’ books were cooked to accommodate the millions being extracted by Vele Investments.

Even the physical cash at the branches does not add up, with R460 000 in notes and coins apparently missing.

He also said that any director of VBS claiming they didn’t know of any fraud at the bank is lying.

At the very least all of them, including Ramavhunga, received undeclared and untaxed second salaries directly from Vele – in addition to their VBS salaries. Ramavunga’s official R1.6 million package was a small part of his actual pay.

In the course of last week the curator of VBS secured sequestration orders against Ramavhunga and Mukhodobwane as well as VBS chief operating officer Robert Madzonga, chief financial officer Philip Truter and chairperson Tshifhiwa Matodzi.

The judge found their various attempts to fend off sequestration unbelievable.

This ranged from Mukhodobwane claiming he was duped into providing self-incriminating evidence to Ramavhunga claiming he never knew about any fraud and received no benefits himself.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24


Read the digital editions of City Press here.
Read now
Voting Booth
Tourism Minister Lindiwe Sisulu’s comments on the Constitution and the judiciary has been termed an “extraordinary attack” that is “dangerous and regressive”. What are your thoughts?
Please select an option Oops! Something went wrong, please try again later.
She’s within her rights
10% - 57 votes
It’s all politics
27% - 148 votes
It was irresponsible
63% - 353 votes