VBS looting: SACP suspends former mayor linked to banking scandal

VBS Mutual Bank.
VBS Mutual Bank.

Gilbert Kganyago, the former mayor of Limpopo's Capricorn District Municipality (CDM), was suspended as the SA Communist Party's (SACP) provincial secretary on Friday, following recent revelations that he was linked to the VBS Mutual Bank looting scandal.

The party's provincial spokesperson, Machike Thobejane, confirmed the suspension to News24: "He was suspended around the issue of the VBS saga. It's about the money invested in the bank.

"We suspended him to clear his name because the party's stance is that all those implicated in the saga must fully cooperate with due process and to accordingly step down."

He said a special provincial general council (PGC) would be held to inform members of the developments around the suspension.

Kganyago has in the past denied any involvement in the VBS saga. He could not be immediately reached for comment on his suspension.

READ: Ex-VBS bosses fail to pitch for disciplinary hearing

At a previous PGC last month, he offered an explanation for his actions and this was accepted by the party.

But the timeline of events provided to the media this week by the current Capricorn District Municipality mayor, John Mpe, sharply contradicted Kganyago's persistent denials on the role he played in the investment of R60m into VBS in 2015.

Mpe became mayor of the municipality after the August 2016 municipal elections. He said he was providing the timeline to rectify the "distortions and deliberate omissions" by SACP general secretary Solly Mapaila.

He said documents in possession of the municipality show that for the first time in the history of the municipality, Kganyago introduced the concept of investment reports becoming a standing item on the mayoral committee's agenda.

At the time, the municipality had invested just over R301m with Nedbank, more than R150m with Investec and R300 668 with FNB.

At a meeting on November 26, 2015, the committee chaired by Kganyago took a resolution - without municipal council approval - to diversify the investment portfolio to empower black-owned institutions.

READ: I never told municipalities to support VBS - Supra Mahumapelo

Then R20m of the first R60m was deposited into VBS on December 18, 2015, followed by R40m on December 23, 2015 – facilitated by the then acting chief financial officer (CFO), Thomas Nephawe. This was "appreciated" by the mayoral committee at its meeting on April 21, 2016.

According to Mpe, matters came to a head when Mariette Venter, who was then deputy CFO and succeeded Nephawe to an acting position, insisted on recalling the R60m investment in VBS. Venter's motivation was also that VBS was not graded.

"Part of her role was to relook investments and the R60m had to be withdrawn from VBS so that the municipality could decide where to reinvest the money based on the Audit Committee report and investment policy of CDM. This became a problem to the mayoral committee," Mpe said.

"On the 11 July 2016, the acting CFO (Venter) received a notice of intention from the accounting officer to suspend her," Mpe said.

He said the council only became aware of the VBS saga when the South African Municipal Workers' Union (Samwu) wrote a letter expressing its concern following a notice to suspend Venter, and requesting a detailed report on the VBS investment.

READ: VBS looting 'racketeering of its worst' kind, Hawks interviewed 65 witnesses

The council speaker then wrote a letter to Kganyago but was ignored, Mpe said.

"The council was then notified about the VBS investments for the first time. It was then resolved that [Venter] be immediately recalled from the unlawful suspension and that the matter should be investigated," Mpe said.

The current administration under Mpe has since recovered the R60m VBS investment with interest.

Mpe said it was not smooth sailing to recover the money as VBS argued that it was funding the mayoral special projects.

"But there are no records showing the funding," he said.

Kganyago is now a member of the Limpopo legislature.

Premier Stan Mathabatha, who is also the ANC's chairperson in the province and sits on the SACP central committee, was this week grilled on why politicians were being let off the hook while municipal officials, who apparently followed instructions, were being suspended and dismissed.

"We are not protecting politicians. Their day will come," he said then.

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