Scorpio

Along with the R16.1m in illicit payments, VBS approved Brian Shivambu’s R1.46m home loan, with a little help from uBhuti ka Brian

By Pauli Van Wyk 9 December 2018

Economic Freedom Fighters (EFF) deputy president Floyd Shivambu, October 16, 2018. (Photo by Gallo Images / Sowetan / Thulani Mbele)

Leaked emails show EFF deputy president Floyd Shivambu used his influence with VBS Mutual Bank’s management in order to get a VBS home loan to buy a house for his parents to live in. The R1.46m home loan is registered to the slush fund his brother Brian Shivambu operated.

Despite not qualifying for a loan, VBS Mutual Bank gave Brian Shivambu’s company Sgameka a R1,46m home loan after his brother Floyd Shivambu had private discussions with VBS chair and kingpin in the bank robbery Tshifhiwa Matodzi, leaked emails show. This VBS home loan was given to Sgameka Trading on top of the illicit R16,1-million that Brian Shivambu received in a fronting scheme on behalf of his brother, EFF president Julius Malema and the Economic Freedom Fighters — all of it funded by the poor and vulnerable VBS-depositors.

The house, situated in Witpoortjie, West Rand, Johannesburg, was registered to Sgameka as an asset at the behest of Floyd Shivambu and used for the benefit of the Shivambus in a questionable deal that was not reported in the investigative report titled The Great Bank Heist. Focusing only on a trail of illicit VBS funds utilised for two houses and some cash seemingly directed towards these houses, Scorpio has traced R2.3-million in VBS funds diverted towards the personal interests of Floyd Shivambu, as set out and explained beneath.

The elderly Shivambu couple moved into the Witpoortjie house in October 2017. They moved out of the house, in November 2018, sources confirmed.

The couple was left vulnerable when their sons’ slush fund, Sgameka Trading, was revealed as an “extremely strategic” cog in the VBS robbery.

Scorpio found no evidence that the Shivambu parents were aware that the house presented to them by their sons was funded by the country’s poor and vulnerable. Scorpio will therefore not reveal their names, nor the house address.

The Great Bank Heist report by advocate Terry Motau and law firm Werksmans, dated 30 September 2018, highlighted how the poor was robbed to fund the lifestyle of select businessmen and politicians — including the EFF. The report focused on the first tier receivers of funds flowing out of the bank in a variety of illegal schemes and did not necessarily mention the true beneficiaries of the bank robbery, which among many, included Floyd Shivambu, Julius Malema and the EFF.

This is a story about additional money, also stolen from the poor, flowing towards the EFF-linked slush fund and proxy, Sgameka Trading, for the benefit of the Shivambus. But more so, the facts uncovered by Scorpio highlight crucial questions about the EFF deputy leader’s influence and participation in The Great Bank Heist. Our investigation further strengthens a recurring theme where Floyd Shivambu uses proxies and fronts in order to conceal his business deals.

The Brothers Shivambu in real estate action

Floyd Shivambu commented on Scorpio’s investigation, saying:

Fraudulent activities are dealt with by the criminal justice system and not some imaginations of a lousy journalist… I think your narrative is bullshit and pure drivel driven by narrow obsession. Please give me the proof that I received R10-million from VBS.”

He did not deny that he had private discussions with then chairman of VBS Mutual Bank Tshifhiwa Matodzi, nor that he used his influence with several VBS bank managers in order to get the VBS home loan, but referred questions about the Witpoortjie house to his brother Brian Shivambu.

Brian Shivambu did not react to questions relating to whether Floyd Shivambu used his influence in order to get the loan, but answered in this way to the direct question:

I applied for a housing loan and I was given the loan and I am paying for it.”

Floyd Shivambu initially spat fire and brimstone in late October, threatening Daily Maverick with legal action after an investigation fingered him as a major beneficiary of the illicit VBS funds flowing through Sgameka Trading. When questioned on the status of legal action against journalists, he said:

I will never sue stupidity and foolishness because I just dismiss their lies and fiction. Your line of reporting is, to be honest, foolish and I will never dignify such with legal action.”

He further denied ever living in a Pine Avon, Fourways house, which investigations indicate is connected to diverted VBS funds.

Brian Shivambu said his lawyers will approach the court in an attempt to review and set aside The Great Bank Heist report “before the end of this week” [ending 7 December 2018]. “[The lawyers] will file and we will win the court case to dismiss the nonsense contained in the report.”

The Witpoortjie house and how Floyd Shivambu ironed out the creases

The first money transferred to Sgameka Trading was an illegal R5-million payment on 8 June 2017 from the VBS-linked company and front Malibongwe Petroleum, the company’s bank statements show. Soon thereafter, three Shivambu siblings started house hunting, along with their parents, in the West Rand. (A woman introducing herself as Floyd and Brian Shivambu’s sister included her name and contact details on the property documents. Scorpio found no evidence that she was aware of the origin of the illicit funds.)

The Shivambu siblings settled on one of the most affluent houses in the area — a house which their elderly parents “adored”, sources said, and an offer to purchase was signed in September 2017. Floyd and Brian Shivambu’s private email and telephone numbers are included on these documents, along with contact details for their parents. The deal would have initially been concluded as a full cash sale, documents, confirmed by sources, show. But the brothers Shivambu wanted to start a new business in Soweto, were busy buying houses for themselves and were busy sending almost a third of Sgameka’s R16.1-million to Mahuna Investments, another slush fund masquerading as a company linked to Julius Malema.

So Brian Shivambu asked VBS for a home loan instead. He did not qualify for a R1,46-million loan and a credit check labelled him a “very high risk”. Floyd Shivambu, however, seems to have ironed out the creases during a private conversation with then VBS bank chairman Tshifhiwa Matodzi. Matodzi was fingered as robber-in-chief and a central figure in the misappropriation of VBS funds that caused the bank to implode, as showed in The Great Bank Heist. (Matodzi was unreachable for comment.)

Brian Shivambu mentioned the meeting between his brother and Matodzi in an email dated 19 September 2017 to then VBS credit manager, David Ntlhokwe.

Said Brian Shivambu:

Please receive the attached documents referred by Matodzi following the discussion Matodzi held with Floyd. It’s about the house purchase. It’s urgent, and should be registered a mortgage asap (sic).”

(Neither Floyd nor Brian Shivambu disputed the veracity and accuracy of the email.)

The documents attached to the email related to the house purchase and included the same “very high risk” credit report and bank statements.

Within two days, on 21 September 2017, a property valuation was finalised and VBS’s Ntlhokwe approved the bond.

Three curious facts about the bond approval must be highlighted because it speaks to the influence Floyd Shivambu had with VBS bank managers:

  1. The bond was approved on condition that Brian Shivambu’s three Capitec loans be settled. Despite Brian Shivambu signing the agreement, these Capitec loans, then totalling just under R30,000, have not been settled. In fact, his debt has since grown to about R70,000;

  2. Handwritten notes on the bond approval documents state that Brian Shivambu’s “average turnover” a month is R2.5-million, which equals R30-million a year. The notes seem to have been added to bolster Brian Shivambu’s application for the home loan. Yet, the fact that a credit evaluation found him a “very high risk” client was not deleted from the documents. Another contradictory fact is that the income evaluation (average turnover a month) was based only on Sgameka Trading’s bank statements. Sgameka’s only income was proceeds of crime derived from various fraudulent deals aimed to fleece money from the VBS, as shown by Scorpio in a previous investigation. Bank managers were in on the deal and were aware of this; and
  3. A verified address, accompanied by a utility bill, of the owner of Sgameka was a requirement for the bond consideration. Brian Shivambu submitted the address in Grosvenor Road, Bryanston, Johannesburg, where Floyd Shivambu had rented before his short-lived stay in the Pine Avon complex, Fourways. This fact, again, suggests that Floyd Shivambu was the real face behind Sgameka with his brother as proxy and front.

Despite glaring facts that suggested Brian Shivambu should not have received a home loan valued at R1.46-million, VBS registered the loan to Sgameka anyway.

***

By December 2017, the property was registered at the Deeds Office as an asset to Sgameka. But not before there was another hiccup. Finalisation of the transaction stalled towards November 2017, again necessitating Floyd Shivambu’s personal intervention.

From his personal email account, Floyd Shivambu sent an email, dated 21 November 2017, to VBS’s Ntlhokwe, the conveyancer attorneys, the property agents and his siblings.

Greetings,” Floyd Shivambu wrote in the email time-stamped at 11:56. “Let’s please finalize the whole transaction as urgent as possible. David [Ntlhokwe] please assist with the process that is needed from your [VBS’] side. Regards, NFS.”

The initials stand for “Nyiko Floyd Shivambu”.

(Neither Floyd nor Brian Shivambu disputed the veracity or accuracy of the email.)

Nine working days later, on 4 December 2017, the house was registered at the Deeds Office to Sgameka’s name.

The Witpoortjie house is still registered in the name of Sgameka and, according to Brian Shivambu, he is paying the bond. Replying to a question over whether he serviced the R1.46-million loan, Brian Shivambu said:

Yes I have a housing loan, which is now with nedbank and I pay the monthly instalments. It’s up to date. (sic)”

He did not mention that the bond was not up to date while registered at VBS.

Scorpio has not yet found anything that proves Brian Shivambu is indeed servicing the bond. He may have an alternative facility registered to his other businesses. If so, the source of the funds is uncertain.

Brian Shivambu did not dispute that his brother was a major driver behind the deal, nor that he acted as Floyd Shivambu’s proxy and front.

Asked about whether the loan has been serviced, Floyd Shivambu said:

I don’t have a loan in Witpoortjie.”

Factually, this is correct. However, Scorpio has established a recurring theme where Floyd Shivambu is always once or twice removed from the actual paperwork.

He did not dispute being the true driver behind the deal, but deflected questions over the Witpoortjie house and other businesses to his brother.

***

In addition, Sgameka paid more than R100,000 between October 2017 and June 2018 towards the bond on the Witpoortjie house and occupational rent — but did not keep to the agreement with VBS and paid more than R50,000 less than what was owed to the bank in this period. There is no evidence of repercussions for Sgameka’s failure to honour its agreement with the bank. These omissions seem to have been forgiven, because of Sgameka’s importance to the VBS looters. In November 2018 Scorpio revealed that Matodzi labelled Sgameka an “extremely strategic account” in WhatsApp discussions with another bank manager.

Sgameka’s bank statements further show that about R200,000 was spent on “house essentials”, “cutlery and cleaning”, “bedding” and “rates and taxes”. The timing suggests that these housing expenses are also linked to the Pine Avon flat in Fourways. Mail & Guardian’s Thanduxolo Jika and Sabelo Skiti revealed on 30 November that “more than R400,000 of illicit VBS Mutual Bank funds was used… as a deposit to purchase a R2.7-million townhouse in Fourways, Johannesburg”.

Upon perusing Sgameka’s bank statements, Scorpio found that the company paid at least R530,000 towards the Pine Avon flat. The figure includes money earmarked for the agent, the registration of the bond and payments towards acquisition deposits.

According to the M&G sources Floyd Shivambu lived in the flat, using his brother Brian Shivambu as a proxy and front for the deal.

Scorpio independently verified that Floyd Shivambu indeed lived in the flat after he was robbed at a Bryanston house he had been renting.

Floyd Shivambu has vehemently denied to Scorpio and the M&G that he has ever lived at Pine Avon, despite Sunday World quoting him in the affirmative.

When M&G visited the property and dialled the Shivambu unit’s number into the complex’s intercom system, it read “FLO”.

***

Simply put, documents show that Floyd Shivambu used his influence with VBS bank managers in order to get a home loan registered to Sgameka for the benefit of his parents. The bond instalments for this house were not diligently paid, and when they were paid, illicit VBS funds were used.

In several instances, that include their parents’ house and the Pine Avon flat. Brian Shivambu was used as a proxy and front in the deals while Floyd Shivambu was the driver and influencer behind the deals.

In this particular investigation Scorpio traced R2.3-million in VBS funds diverted towards the personal interests of Floyd Shivambu. This figure is collated from the evidence above and includes the Witpoortjie home loan, bond and other payments towards the Witpoortjie house as well as payments towards the Pine Avon house. DM

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