- The ANC's Limpopo treasurer was by all appearances VBS Mutual Bank's chief political fixer.
- Evidence suggests he also connected the VBS fraudsters to the highest echelons of the ruling party.
- He may even have introduced the criminal bank to the Gupta crime family.
Danny Msiza's fingerprints are all over the VBS scandal. As one of the ANC's top six office bearers in Limpopo, his role was allegedly to lean on municipal officials in order to make them channel their budgets towards the bank.
This has been amply documented by amaBhungane and others, but the extent of the political power that allowed him to do this is less obvious.
Msiza stepped aside as ANC Limpopo treasurer in December 2018 after an instruction from the ANC's integrity committee. After a year and a half in the wilderness, the ruling party has reinstated him, raising the question: How powerful is Msiza really?
Reams of evidence garnered in advocate Terry Motau's 2018 investigation on behalf of the Reserve Bank paint a picture of an immensely influential political operative. Some of it has been made public through court cases and some is still confidential, but in amaBhungane's possession.
The intermediary between VBS executives and Msiza was Kabelo Matsepe, at the time a 25-year-old businessman who had been "adopted" by Msiza – according to former VBS chief executive Andile Ramavhunga in testimony before Motau.
Msiza had earlier invested in an ambulance company Matsepe had set up, called Bauba911.
Matsepe, through a company called Moshate Investments, signed a business development agreement with VBS and seemingly billed the bank about R30 million in a year and a half, starting mid-2016.
Matsepe would not answer questions from amaBhungane this week.
Msiza could not be reached by phone or message.
Moshate Investments was the largest of up to eight intermediaries that earned "commissions" from VBS for securing huge deposits from municipalities and some other public sector entities.
There is ample evidence of Matsepe constantly calling on Msiza to make these deposits happen.
There is also evidence of Moshate Investments subsequently paying money to Msiza, though Motau's investigation could only definitively pin down relatively small amounts, like a R716 000 payment into Msiza's bond account at VBS.
Msiza had gone to court to try and force the Reserve Bank's Prudential Authority to expunge any mention of him in the Great Bank Heist report. The case has been heard and judgment is expected before long.
According to a "reasons and record of proceedings" Motau filed in that case, Msiza received R1.5 million from Moshate on 17 January 2018 – the same day Moshate received R2 million from VBS.
In court papers, Msiza has maintained that it is ridiculous to say he is the kingpin or that Matsepe worked for him when all the evidence shows Matsepe earned millions, but not he, Msiza.
Matsepe's indiscreet WhatsApp messages with VBS executives are more often than not what implicate Msiza. Matsepe freely discussed Msiza's affairs and relayed messages between the provincial boss and the VBS crowd.
That evidence, combined with testimony from VBS executives, paints a picture of a significant power brokerage. He was certainly central to the political glow and sense of protection the VBS conspirators believed they had.
In March 2017, Jacob Zuma did his infamous Cabinet reshuffle, where he kicked out Pravin Gordhan as finance minister, replacing him with Malusi Gigaba.
The VBS crowd was seemingly very much in the loop at least a month before the announcement.
In February 2017, VBS treasurer Phophi Mukhodobwane and his chair, Tshifhiwa Matodzi, exchanged messages about "the importance of" a new finance minister getting appointed. Gordhan was perceived as a problem.
Mukhodobwane told investigators that there was a concern that Gordhan was an impediment to VBS getting money from the Public Investment Corporation (PIC).
The transcript of Mukhodobwane's testimony shows he appeared to cite Msiza as the source of VBS's information about an imminent change of ministers.
The PIC is meant to be independent, but nonetheless falls under the ministry of finance. By tradition, the deputy minister of finance became the chair of the PIC.
"At the time I was told there were talks about the possibility of Mr Sifiso Buthelezi becoming minister of finance and that could possibly work in our favour in terms of getting funding from the PIC," Mukhodobwane testified.
Buthelezi did in fact become Gigaba's deputy and VBS would later try to appeal, unsuccessfully, to him when they ran into regulatory trouble.
In February 2017, it appeared that Msiza himself was tipped for greater things.
Matsepe was having a WhatsApp conversation with Palesa Makhubela, the chief financial officer of the Makhado municipality, and, according to evidence produced by Motau, a recipient of VBS kickbacks in exchange for deposits.
She is now employed by the Greater Tzaneen municipality, but could not be reached to confirm the exchange with Matsepe.
According to the WhatsApps, they argued a little about the commission she and two other officials were allegedly getting for a two-month deposit at VBS. Matsepe told her that Msiza said three of them must split it.
Then came the kicker.
MATSEPE: "The old man wants to make D a minister and D is refusing, it's a bit of a nasty situation .... Yes we are pleading with him to take bra Stan and make him a Minister, it's clear that D is going Chair the Province"
"Old man" was the nearly universal moniker for Zuma and from the context it is obvious that Matsepe was referring to the then-president, as only he could appoint ministers.
Matsepe claimed to be in the know about Msiza being approached by Zuma to become a Cabinet minister. "Stan" would almost certainly be a reference to Stan Mathabatha, the premier of Limpopo.
Msiza was, at least in Matsepe's version, a contender for one of the top jobs available as an ANC cadre, but wanted rather to stay in Limpopo.
A year earlier, in 2016, the major South African banks had started cutting ties with the Gupta family, leaving them scrambling to find new bankers.
For a short while in 2017, they found a home at VBS. It looks like Msiza and Matsepe played a role in brokering this lifebuoy.
On 26 April 2017, Matsepe messaged a co-director at Moshate Investments:
MATSEPE: "The Indians also just gave us 20% into a coal mine to thank us for our efforts in their bank issues"
MATSEPE: "Me being Me and Danny"
RESPONSE: "Wowl That’s great news. Congratulations"
There may conceivably have been other "Indians" who own coal mines and were in need of political intervention in their "banking issues" at the exact same time as the Guptas, but it seems likelier that they were in fact talking about the then-president's friends.
The Gupta family's coal mines Optimum and Koornfontein opened VBS bank accounts in early 2017 and their contract mining company Westdawn likewise banked through VBS.
A forensic accountant's report produced for Motau showed that Westdawn moved R52 million through VBS in the brief period it banked there.
After a few months, however, even VBS had to drop the infamous family.
The Gupta name would pop up again – erroneously this time – a few months later in relation to VBS's greatest political problem: National Treasury.
On 15 August 2017, the municipal patronage system around VBS faced an existential threat. Treasury sent out an email to municipal managers and chief financial officers warning them that their deposits at the mutual bank "are not permitted" and that any municipality with money at VBS "must review its investments to ensure compliance".
Matsepe and Ramavhunga exchanged messages later that day. Ramavhunga seemed to think it was some kind of political retaliation related to VBS's decision to follow other banks in dropping the Gupta family as clients.
RAMAVHUNGA: "Is it not this Gupta thing?"
MATSEPE: "They don't have such influence"
RAMAVHUNGA: "Eish, they are sending me the circular"
RAMAVHUNGA: "This thing is a problem. It went to all municipalities"
MATSEPE: "To buy time we will have to do an urgent court application"
The next day, Msiza's political clout was seemingly being called on and Matodzi, the chair of VBS, was also getting involved.
MATSEPE: "Evening TG [reference to treasurer general, Msiza's position] is checking if you are available around lunch time to deal with this national treasury thing"
RAMAVHUNGA: "Yes I am"
RAMAVHUNGA: Chair has agreed"
MATSEPE: "13:00 lunch"
RAMAVHUNGA: “Okay, chairman has agreed…Let me know of the venue"
The following day things were escalated dramatically.
MATSEPE: "You have a meeting with the Deputy Minister of Finance on Sunday at 13:00"
MATSEPE: “You will be going with Danny”
According to Ramavhunga's testimony to Motau, the meeting with deputy minister Buthelezi never went ahead.
And Buthelezi told amaBhungane by email: "The alleged request for such a meeting never reached me… I was never approached by Mr Msiza or VBS to provide any assistance…
"Had such representations been made, I would have then referred correspondence to the DG [director-general]."
The problem with National Treasury and the municipalities would plague VBS to the bitter end. The bank and its political patrons had to convince local governments to hand over hundreds of millions of rands even as Treasury was telling them it contravened the Municipal Finance Management Act.
But other powerful ANC figures were also dangled before the VBS bosses.
On 20 September 2017, Matsepe messaged Ramavhunga:
"Danny says you must call Supra and ask to meet. Supra will be around Johannesburg tomorrow. He says we must explain to him what is happening with this Treasury thing."
"Supra" would have been Supra Mahumapelo, then premier of North West.
"What was that all about?" Ross Hutton, the main interrogator in Motau's investigation, later asked Ramavhunga, according to transcripts.
Apparently VBS was branching out and looking for funding from the provincial sphere of government rather than local municipalities.
The point of contact in North West had been provincial treasurer Ndlela Kunene, but VBS was hitting another brick wall, Ramavhunga testified.
RAMAVHUNGA: "At the time Ndlela Kunene had said he can’t do the investment because they had sent a letter to Treasury to request permission if they could engage with us."
MOTAU: "And what did National Treasury say?"
RAMAVHUNGA: "I don't think they responded at the time."
HUTTON: "So what is the issue? Why is the Premier involved now?"
RAMAVHUNGA: "At that time Ndlela had submitted a letter to the National Treasury and it had not come back. I think that is what I needed to explain to the Premier.”
It is not known if Ramavhunga met Mahumapelo, but the matter was soon allegedly escalated from North West to National Treasury.
Less than a week later, on 26 September 2017, Matsepe reported back to Ramavhunga:
"Kunene just gave me an update on his meeting with Dondo. All looking good. Can we meet today?"
"Dondo" is and was then the director-general of National Treasury, Dondo Mogajane.
Kunene told amaBhungane he had only broached VBS with Mogojane as an aside.
"I have never had a meeting with the Director General on the VBS other than asking him whether VBS was approved in terms of Section 7 (2) of the PFMA.”
But provincial deposits were a non-starter for the same reason as municipal deposits should have been. The PFMA restricts provinces to putting their deposits in registered banks, which excluded VBS.
VBS's lobbying efforts would continue through the end of 2017 and into 2018. The possibility of a massive irregular R1 billion deposit from Prasa had arisen which would have saved VBS from imminent collapse. To get this money the political winds needed to blow in the right direction.
Near the end of the year, the ANC was preparing for its watershed elective conference where Cyril Ramaphosa would square off against Nkosazana Dlamini-Zuma for the ANC presidency.
Msiza's connection to VBS was known all the way up to the ANC's treasurer-general at the time, Zweli Mkhize.
On 12 December 2017, Msiza forwarded a message to Matsepe from someone at the ANC's business funding arm, the Progressive Business Forum:
"Dear Danny. TG asked me to call you regarding Venda Bank and their participation at the conference. Tried calling you. Can you please phone me back urgently. This number or 0837996058"
“Taking off.pls call number as per message ... for VBS suite"
The number provided is for Daryl Swanepoel, the convenor of the Business Forum.
VBS apparently sponsored a suite at the event for businesspeople that usually happens on the side-lines of ANC conferences. VBS also paid R703 000 to hire buses to take delegates to the conference.
An ANC official sent the invoice to both VBS's Mukhodhobwane and Msiza.
VBS had, however, thrown in its lot with the losing side.
The electoral conference was held on 19 December and Ramaphosa narrowly defeated Dlamini-Zuma to become ANC president and, automatically, the president of South Africa.
The political support for the Prasa deal "evaporated", Mukhodobwane later told Motau.
The go-between with Prasa was Bhekwayinkosi Gift Manyanga, whose company Bhekwam Holdings signed a "Consultancy Agreement" with VBS in March 2017.
"Manyanga himself told me that the outcome of the December elections was unexpected, and that's why it didn't happen," Mukhodhobwane claimed.
Manyanga now denies this: "I never said anything to Phophi regarding this transaction," he told amaBhungane. "The Prasa transaction was not dependent on the conference."
The VBS gang would try to make one last desperate political appeal, apparently once more using the power of Msiza's network.
At the end of January, Ramavhunga, Mukhodobwane and Matsepe flew to Davos to attend the World Economic Forum.
According to Ramavhunga, the point of the trip was to meet Malusi Gigaba, the man Zuma had controversially appointed as finance minister the previous year.
He also wanted to meet Paul Mashatile, the newly elected treasurer of the ANC.
Matsepe had a "relationship" with both men, Ramavhunga told Motau. As was seemingly always the case, however, Matsepe's relationships were most likely really Msiza's.
It is not clear whether either meeting happened.
Whatever traction VBS might have hoped to get out of meeting Gigaba would have been short-lived anyway. Gigaba was fired the next month as part of Ramaphosa's overhaul of the Zuma Cabinet he inherited.
Two months later, VBS was toast.