Some months ago, a defiant Tshifhiwa Matodzi told me he was eagerly awaiting his arrest. It would be his chance to clear his name in a real court instead of the court of public opinion, he said.

“I always tell my family that I would have preferred to be arrested the next day because all these other things are sideshows; you don’t get anything out of them… I would be surprised if I am not arrested,” the former VBS Mutual Bank chair said during a four-hour interview in November 2019 for my upcoming book on the banking scandal. 

“Better [to] arrest and [let] people have their day in court and answer whether it happened or not. Because the enquiries and other things, those are just money-making, they are not getting to the bottom of this.”

Despite his defiant attitude that day, Matodzi did not look happy or confident in court in June 2020 when he and six of his co-accused appeared on 47 charges of racketeering, theft, fraud and money-laundering, leading to the collapse of VBS in March 2018.

Matodzi told me that far from being the “mastermind” of VBS’s destruction, he was in fact the “mastermind of saving the bank” from certain collapse back in 2013 when he and his erstwhile partners acquired an initial 26% shareholding for a mere R6-million. 

“This bank was going down in 2013; the Reserve Bank had literally made a decision to shut it down and I was the one who fought to bring that bank back,” Matodzi said.

It took more than two years for the first identifiably suspicious transactions to emerge before VBS devolved into a Ponzi scheme and ultimately collapsed in March 2018.

Matodzi’s guilt is almost a given in the public mind. An investigation by Advocate Terry Motau commissioned by the South African Reserve Bank produced the monumental Great Bank Heist report in 2018. 

It painted a damning picture of the façade Matodzi built, complete with several confessions of guilt from his colleagues and subordinates for offences ranging from forgery to bribery. 

Further admissions are contained in unreleased portions of Motau’s investigation.

“That forensic is the worst forensic of all time, it is the worst,” Matodzi told me.

“It is not right for lawyers to conduct forensic reports because they do not have a… standard defining things… When you are an auditor there are certain rules and terms… but what is a ‘loot’? Imagine if you say an accountant must do a nuclear compliance report.”

Why would people confess to crimes they did not commit, I asked him more than once.

“People are weighing their options, maybe thinking the easy way out is to admit this was wrong then I will blame everybody and I will have immunity. And those guys, the Motau guys, they did a lot to many people. Most people thought that the advocate Motau team is Hawks people there. People were scared.”

“I hear from a lot of people that they were generally guided towards me. Psychologically then people think, oh, if I guide them to Tshifhiwa, then I am out.”

VBS Mutual Bank looting suspects appear at Palm Ridge Regional Court on 47 counts of fraud, racketeering, corruption, theft and money laundering on June 18, 2020 in Johannesburg, South Africa. (Photo: OJ Koloti/Gallo Images via Getty Images)

Matodzi ascribed this alleged conspiracy to frame him in part to his fights with top officials at the Reserve Bank and National Treasury in the weeks preceding the collapse of VBS. 

“I had a very nasty fight with Kuben Naidoo [deputy governor of the Reserve Bank and registrar of banks] and that DDG of treasury, [Ismail] Momoniat.

“We did not agree and then they said I am arrogant and all that. Already by the time the curator came, there was an anger, there was someone they were looking for.”

But it goes much deeper than that, according to Matodzi. He believes, or claimed to believe, that VBS was caught between two powerful forces bent on its destruction. 

On the one hand, the white-owned banking establishment would not countenance a successful black-owned competitor, no matter how small – though he provided no evidence for this. 

On the eve of VBS being put under curatorship on 11 March 2018, Matodzi wrote a long and ostensibly private letter to Naidoo decrying how VBS had been allegedly quashed. “In the end, we were faced with a well-organised and powerful system which does not tolerate growing black banks and black excellence,” he complained.

On the other hand, he claimed, there was a political assault stemming from VBS’s perceived support of the “Jacob Zuma faction” in the ANC. Matodzi compared his fate to that of Jacob Zuma and Thabo Mbeki, who both vacated the presidency of the ANC under a cloud of factional infighting.

“If you look at the way the ANC destroyed our country, you know why. Each time there is a president, they make him a god and towards the time that he has to go, he is a villain, but you have the same crowd in the background…

“People have adopted that in corporate culture where they say, no, it was him. 

“My suspicion is that they sat down and allocated each other blame and, okay you say this, you say this and we’ll get away with this.”

But get away with what? 

Despite the overwhelming evidence and number of confessions, Matodzi insisted that there was never any theft at VBS. His theory is that all the supposed missing money was in fact safe and sound – or never existed to begin with.

“On my side, every single money can be accounted for, it doesn’t need investigation.” 

His theory is that all the apparently missing money came down to shockingly bad record-keeping. One of the charges levelled at him and his co-accused relates to the transaction in which Vele Investments bought 51% of a company called Insure Group Managers for R250-million. 

The money was – by all appearances as well as the testimony of former VBS treasurer Phophi Mukhodobwane – invented through fake book entries. 

Matodzi, however, said that it was a legitimate loan to Vele that Mukhodobwane and other VBS executives somehow failed to put in writing. This monumental lapse would have been in relation to the bank’s single largest loan, given to its largest shareholder which shared a chairman with VBS in Matodzi.

VBS Mutual Bank looting suspects appear at Palm Ridge Regional Court on 18 June 2020 on 47 counts of fraud, racketeering, corruption, theft and money laundering in Johannesburg. (Photos: Gallo Images / OJ Koloti)

This staggering incompetence was repeated on other occasions with other transactions between VBS and Vele, Matodzi claimed.

“The next thing they have concluded the transaction, they have already given each other money. Where is the agreement? They say no, we’ll print it, we’ll print it… Their administration was not up to standard.”

“Mistakes are mistakes and people must learn to own up. That first selfish denial of their administrative errors has turned now into a criminal issue.”

Simple accounting mistakes were blown massively out of proportion, Matodzi said.

“My wife is also an accountant. I always say to her there is no poetry in accounting. You have to stick to a certain language. What is… ‘missing’? [The curator of VBS] is playing with language in a very dangerous way. So it is the language. This is done, I know, to influence judges. That’s the only reason. I think it is the curator and his media strategies. There is no money missing.” 

VBS Mutual Bank customers queue outside the branch, hoping to withdraw money they saved for stokvels and burial societies on June 20, 2018 in Thohoyandou, South Africa. (Photo: Gallo Images / Sunday Times / Antonio Muchave)

Matodzi said the curator should have used “easy, simple language” to convey that there may have been transactions where the accounting was not done properly.

“A lot of this money they are talking about, whether there was double entry or not, it is still in the record of the bank. They know, they are just deliberately misleading.” 

If no money was stolen, why did VBS implode?

“The crash was a political issue, it was not the looting,” said Matodzi.

The VBS model was based on large deposits from municipalities, mostly in Limpopo. 

These deposits of hundreds of millions of rands were allegedly procured by bribing municipal officials because Treasury regulations prohibit local governments from putting money in a mutual bank, such as VBS was.

The municipal deposits were then sucked out into the pockets of Matodzi, his co-conspirators and his companies – at least according to all the evidence and confessions made public thus far. 

Matodzi said that in reality, the only reason VBS ran out of money was that municipalities stopped making deposits, not that their deposits had been stolen.

“What happened was that when there is a change of guard, that was the risk with municipalities. Municipalities are highly political. The people who were supporting us, putting deposits. As soon as Cyril [Ramaphosa] came in, they panicked. So it was more like a run [on the bank]. It was more the politics.”

“I think from the political side, the new dispensation, they had the assumption that maybe we were the funders of Jacob Zuma or the faction, so what do you do?”

VBS’s status as “Zuma’s bank” stemmed from a home loan they gave the then-president to reimburse the state after then public protector Thuli Madonsela found that state-funded upgrades like a pool and amphitheatre were not legitimate security measures.

VBS’s last gasp was a controversial effort to get the Passenger Rail Agency of South Africa to deposit R1-billion to make up for all the municipal deposits the bank had lost. This plan coincided with Ramaphosa’s victory in the ANC leadership race at the end of 2017. 

Shortly after Ramaphosa won, the deal fell through.

VBS’s connections to ANC as well as EFF politicians have been widely publicised. 

“At Vele, obviously there were some payments that were made for them which I think maybe, ethically, it was not right. But… the guys help you with finance.” 

The ANC’s treasurer in Limpopo, Danny Msiza, was a key figure in procuring municipal deposits for the bank while ongoing investigations show that EFF figures received money from VBS.

Matodzi claimed that he specifically ordered VBS chief executive officer Andile Ramavhunga to “be very firm with your head of credit at VBS because everybody wants money”. 

“You’d have all sorts of people. ANC, EFF, everybody. You will meet with them. After they are gone, you will say do the right thing. If you cannot approve it [loans], say it. But they fell in a trap of celebrities. Where they think that maybe this guy is big, maybe I should … but what about my instruction to do the right thing?”

“Let’s separate. I was a rich person even before I came to the bank… That’s why I could afford to buy the bank. I had 12 cars, I had a Range Rover, I had a Porsche before that, you know. My lifestyle never changed.

Matodzi nonetheless thought the media revelations about the EFF leadership’s receipt of VBS money amounted to a political “strategy”.

“That’s politics. In VBS, there are so many politicians, ANC, SACP, but why pick EFF? You can see it is a strategy.”

Matodzi would only concede to doing one thing wrong: being too generous.

Among the irregular payments forming part of the charge sheet against the VBS accused are supposed “bonuses” and other payments made to executives, often out of the accounts that Vele held at VBS.

“At Vele, obviously there were some payments that were made for them which I think maybe, ethically, it was not right. But… the guys help you with finance.” 

Matodzi explained his own high life by claiming he was already fabulously rich when he came to VBS.

“Let’s separate. I was a rich person even before I came to the bank… That’s why I could afford to buy the bank. I had 12 cars, I had a Range Rover, I had a Porsche before that, you know. My lifestyle never changed.

“Other people’s lifestyles actually changed. Maybe they wanted to be like me. The only car that I bought is a Ferrari. I had all those cars before VBS so my lifestyle never changed. My assets that I have, my farms, my what what, I had that. My houses, I had.” 

Matodzi no longer has much of that after being sequestrated in 2018.

Unlike some of his co-accused, Matodzi did not even oppose his sequestration. 

“I am unemployed. It is bad. Obviously I am unemployable and I don’t want to be employed. I am a businessman. They sequestrated me, but they forgot to sequestrate my brains. It still works. I am not worried about that. I grew up in a business culture from home, I know how to survive.”

“Why did I allow sequestration? Personally, my allegations were criminal and to go to a civil matter and it’s an urgent case, how can you have an urgent criminal case? It doesn’t work like that. Basically, the sequestration thing is like Nuremberg trials, you know, there is no difference.”

“You see when you are at my level, you take it from a philosophical point of view… I would rather go down and people knowing what I was trying to achieve than deny and say no I’m sorry, I did this, I stole that. I did not steal anything. We had good intentions. If things did not work out our way, we must bow out with pride.” DM

 *The amaBhungane Centre for Investigative Journalism, an independent non-profit, produced this story. Like it?  Be an amaB Supporter to help us do more. Sign up for our newsletter to get more.