From 2016 until VBS Mutual Bank was robbed into insolvency in early 2018, Limpopo businessman Kabelo Matsepe “gratuitously” received R35.4-million in VBS loot. This figure, Adv Terry Motau and law firm Werksmans found, was made up of millions in cash and loans.

The Revenue Service (Sars) also accuses Matsepe of having lied about his income tax and VAT from as far back as 2015. He owes Sars R61,531,311 in income tax and VAT, of which the lion’s share relates to penalties due to under declaration and non-payment.

The assessments in relation to Matsepe’s income tax were done for the years 2016 to 2018, and his VAT for the period ending 2015 until March 2018 – the month VBS was put into curatorship. 

The first VBS money to enter his accounts was recorded in September 2016.

Already in a heap of trouble with the authorities, Matsepe must now fight Sars’ application for his final sequestration in the Pretoria High Court. The taxman argues that the amount Matsepe owes (liabilities) far outweighs his assets. Sars calculated his assets at R5.1-million: a property in Pretoria worth R4-million, and a VW Golf, VW Kombi and Mercedes Benz GLE 63S AMG with a combined value of R1.1-million.

When quizzed about this, Matsepe said, “Well, yes, who hasn’t had their run-ins with Sars? All of us had been through that. I have no intentions of not paying Sars. 

“My biggest problem is I found myself in a taxi with robbers and I didn’t know it. I was at the wrong place at the wrong time. I am working hard to sort it all out amicably.”

The origin of Matsepe’s riches

Motau and Werksmans Attorneys describe Matsepe as a “politically connected fixer” and a “front” or “middleman” between ANC Limpopo leader Danny Msiza, municipalities and VBS Mutual Bank. Based on bank statements, Scorpio in March last year outlined the extent and detail of Matsepe’s dodgy income.

The Great VBS Heist: Former ANCYL Limpopo leader’s R35.4m spending list exposed

Matsepe takes offence at these allegations, claiming he is a “businessman like all other businessmen, trying to make a living. 

“There is no corruption in doing consultancy work and getting paid commissions. I am not this fixer they describe. Yes, people can call me when they have situations. But there is no crime in that.”

He denies any unlawful conduct.

Matsepe does, however, feel misled by VBS Chairman Tshifhiwa Matodzi who claimed it is lawful for municipalities to invest in the bank.

Equally irksome, Matsepe says, is that he had to fight with VBS bank managers to receive his commissions. When the bank imploded, Matsepe claimed R21.6-million in unpaid “commissions” as the bank’s creditor.

VBS bank was robbed into a liquidity crisis – in the last eight months before the bank was put into curatorship in March 2018, the managers became increasingly tightfisted. There was no money left to dish out.

In a phone conversation with Scorpio lasting well over an hour, Matsepe described his business dealings with the bank as those of the quintessential middleman who brought VBS bank and clients (municipalities) together in a mutually beneficial relationship for which he billed “commissions”. These commissions were based on the figure each municipality invested with VBS, as well as the period of investment. According to Matsepe, this is “real world” business.

Motau disagrees. The investigators argue that Matsepe, Msiza, municipal managers and mayors contravened the Municipal Finance Management Act (MFMA) when they facilitated investments from municipalities in a mutual bank. They argue that ignorance of the law is not an excuse – a translation of the Latin phrase ignorantia juris non excusat. This legal principle holds that a person unaware of a law cannot escape liability for violating that law merely because they were unaware.

“Matsepe is further a typical young millennial who did everything on his phone – he connects a large number of the roleplayers in the VBS looting,” a source explained. An additional source confirmed that Matsepe’s cell phone messages bring together the entire criminal network and that authorities are looking at this closely. It seems the Motau report supports this, by remarking on Matsepe’s “ubiquitous” presence in the bank’s affairs.

Scorpio highlighted last year that the first big ticket item on Matsepe’s shopping list was a R2.39-million Range Rover, financed through VBS. The second big acquisition was a nearly R5.5-million bonded house in Midstream, Pretoria, also through VBS.

When quizzed on why not all of the installments were paid, Matsepe said he held back the money because VBS owed him millions in commissions.

The legalities

Sars issued Matsepe’s tax assessments in March 2020. Matsepe indicated to Sars that he would object to the assessments within the prescribed 30 days, but in the end failed to do so. In terms of the Tax Administration Act, such an assessment will become final if no objection is made in 30 days.

In August 2020, Sars filed its certified statement with the court under s172 of the Tax Administration Act and received a civil judgment in its favour.

Matsepe says he is meeting with Sars next week.

“The matter will definitely be resolved amicably. This is based on a technicality because of the 30 days that passed without an objection,” he said. DM