The former chief operations officer of VBS Mutual Bank, who owns at least two luxury vehicles and multi-million rand properties, has said that residents of Venda in Limpopo were sleeping on the streets waiting for the monies they deposited in the bank where R1.5bn was allegedly looted.
Robert Madzonga, the bank’s previous chief operations officer and the group chief executive officer of Vele Investments, a company which became the majority shareholder of VBS allegedly via fraudulent activity, described the situation relating to Venda in an email less than two weeks ago.
On March 11 VBS was placed under curatorship and SizweNtsalubaGobodo Advisory Services (Proprietary) Limited, represented by Anoosh Rooplal, was appointed to deal with this.
On Monday the SA Reserve Bank announced that more than 20 000 depositors of VBS would receive their monies as long as the money deposited to the bank did not exceed R100 000. Nedbank would facilitate this.
On its website, VBS said these funds would be available at Nedbank branches from Friday.
In an email dated July 4 to Rooplal, Madzonga said Vele wanted to made several proposals "due to the current situation in Venda where old people are sleeping on the cold, queuing for their withdrawals and the shortage of cash thereof."
Vele Investments allegedly also benefited from the fraud committed at VBS.
Among the proposals was that Vele would surrender its remaining subsidiaries to VBS so that these could possibly be sold to help with VBS’s cash problems.
'People are sleeping on the street'
"We believe Vele can still play a significant role in resolving the current undesirable situation in Venda branches, where people are sleeping on the street waiting for their monies," he said.
"In this regard, Vele is seeking for an opportunity to be part of the solution as one of the majority party involved in this VBS saga."
Madzonga ended the letter saying he wanted to request a meeting with the SA Reserve Bank’s deputy governor, the curator and Treasury "to explore all possible options available, including surrendering of all Vele Companies and an option of a financial bailout from Reserve Bank."
Properties and Porsches
In a founding affidavit dated July 5, Rooplal said that Madzonga had assets, including a sectional title property in Plettenberg Bay that was bought in April 2007 for R2 350 000.
Rooplal said that in March 2017, Madzonga had bought another property for R8 500 000.
The location of this property was simply mentioned as Blue Hills, which is the name of a suburb in Johannesburg.
Rooplal said a Porsche Cayenne GTS, valued at around R1.4m, and a Porsche 911 GT3 worth about R2.8m, had also been purchased by Madzonga.
"These are the assets I have been able to identify thus far," he said.
Rooplal referred to a June 29 article published by the Sowetan, and said it focused on "Madzonga’s lavish lifestyle".
This article had quoted Madzonga as saying he joined Vele owning more than 20 cars, and also said that Madzonga’s wife Khosi posted and later deleted images of expensive vehicles on social media.
Social media pics hint at further wealth
"I have been able to source some of these images… The images indeed depict a life of luxury and a host of expensive vehicles that comprise the Madzonga fleet," Rooplal said.
He said based on the images posted to social media, it appeared that Madzonga owned eight other vehicles including a yellow Lamborghini, a black Rolls Royce and a red Ford Mustang.
"Having regard to the extent of the fraud, and the numerous high value assets identified via social media, I am certain that further assets will be identified during the course of an insolvency enquiry involving Madzonga," Rooplal said.
'Bank meant to encourage saving'
He explained, in his affidavit, what a mutual bank like VBS was.
"Unlike ordinary commercial banks, mutual banks, such as VBS, operate on a mutual savings bank model," Raplool said.
"These types of banks are specifically aimed at encouraging individuals to save by making deposits into the bank."
The banks provided benefits in that when depositing funds into the bank, an individual could elect to essentially buy equity in the bank.
"A mutual bank is therefore considered attractive to depositors," Rooplal said.
"Depositors earn interest on their deposits and if they take up shares, also earn dividends on the shares."
On July 24, in the Johannesburg High Court, VBS plans to apply for an order to see that Madzonga’s estate is placed under provisional sequestration.
Provisional sequestrations will also be brought against Tshifiwa Matodzi, the former chair of VBS’s board of directors and also the director and chairperson of Vele; and Malusi Ramavhunga, VBS’s chief executive officer; Phillip Truter, the chief financial officer; and Phophi Mukhodobwane, VBS’s general head of treasury and capital management.
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