Company eyeing VBS hails sequestration of remaining directors, vows payback

VBS Mutual Bank.
VBS Mutual Bank.

Investment holdings company Africapacity’s chief investment officer Enoch Ratlabala told Fin24 that the North Gauteng High Court decision to approve the final sequestration of the remaining directors of VBS Mutual Bank was a welcome development in returning some of the bank’s lost funds.

The liquidator of VBS Mutual Bank, Anoosh Rooplal, confirmed in a statement released on Wednesday that the estates of the ill-fated bank’s remaining two directors, former chief operations officer of VBS and group chief executive of Vele Investments Robert Madzonga, and VBS CEO Andile Ramavhunga had been sequestrated. Judge KE Matojane also ordered sequestration of Ramavhunga's wife, Zanele Ramavhunga's estate. The pair are married in community of property.

Judge Matojane further ordered all three respondents to pay all costs, including the costs of senior counsel and all previously reserved costs. 

This forms part of a bid to recover R1.5bn on behalf of creditors. "Some 14 municipalities and over 20 000 retail investors were left out of pocket when VBS was placed into curatorship last year as a result of wide-scale fraud that was perpetrated against the bank," a spokesperson for Rooplal said.

All three parties opposed their provisional sequestrations and asked the Court to set aside the provisional orders, the statement added.

Final sequestration orders were handed down on board chair Tshifhiwa Matodzi, CFO Phillipus Truter and VBS head of treasury Phopi Mukhodobwane in November 2018. 

'Whoever took money, it must be paid back'

Ratlabala has stated an intention to buy VBS Mutual Bank from the liquidator in order to restore value for the bank’s shareholders, though the South African Reserve Bank said earlier in August that Africapacity would require a banking licence first. He told Fin24 that the more people come forward to return any money taken from VBS Mutual Bank, the better for shareholders. 

"That must proceed. If those guys took the money then it must be recovered. Whoever took money from VBS Mutual Bank legally or otherwise, it must be paid back. The depositors and shareholders alike," said Ratlabala.

Ratlabala said he would update shareholders on the latest developments in his efforts. 

"The process is still on and way are still talking to the liquidators in a legal capacity...It is a conversation between us, the current liquidator and the master of the high court," Ratlabala said.

Updates to follow

Rooplal also said the judgment would assist the recovery of assets and that an update would be forthcoming. A spokesperson for Rooplal said the liquidator was not affiliated with Africapacity.

Rooplal said: "The final sequestration of the Madzonga and Ramavhunga estates concludes our efforts to sequestrate all the VBS executives involved in and who benefited from the wide-scale fraud perpetrated at VBS. The final sequestration orders will enable the trustees of their respective estates to intensify the recovery of assets, which ultimately can accrue to the benefit of the estate of VBS."

He added: "Although my duties and remit do not change much from when I was provisional liquidator, the appointment does entitle me to call a second meeting of creditors. This will allow for more creditors to prove their claims. An announcement will be made in the Government Gazette in due course."

* This article was updated on 29 August at 17:00 to reflect additional comment from Rooplal's representative that the liquidator and Africapacity are not affiliated.

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