First published in the Daily Maverick 168 weekly newspaper.

When Nyawasedza Raphunga heard reports of the looting at VBS Mutual Bank, she spent three nights sleeping in the cold outside the bank’s headquarters in Sibasa, Thohoyandou, hoping to retrieve the savings she had been making since the 1980s.

The hard-earned cash of Raphunga and her community was stolen by crooked bankers who distributed it to themselves, to politicians, auditors and businessmen.

Scorpio followed one such strand of money flow to its ultimate end: Sud Restaurant in Soweto, where an opaque ownership structure points towards EFF deputy leader Floyd Shivambu.

Before Margaret Chauke opened a savings account with VBS in the 1990s, she used to hide her money in a mielie sack and stash it away in a vegetable field behind her house. She had kept some of the money she earned from selling fat cakes, snacks and chicken hidden in various places in her home in Ha-Hasani, one of many villages near Vuwani in the Collins Chabane local municipality in Limpopo.

But she grew frustrated because each time she checked on her money, she found that some of it was missing. She suspected her children were helping themselves to her hard-earned cash.

On the advice of other women from the village, Chauke eventually opened an account with VBS in Sibasa, a suburb of Thohoyandou about 45km from her house. “VBS was our bank,” Chauke said from her home this week.

“It was a bank that looked after us old women.” When Chauke eventually opened an account with VBS, she was shocked to discover that she had managed to save around R8,000 in her mielie sack.

“I would take R1,500 to the bank one month. The next month I would take R500. Just like that. It was just money I made from selling fat cakes and sweets. I sold many things, even chicken and some vegetables,” she said.

Chauke and Raphunga, who was employed as a general worker in the Venda homeland administration’s public works department and lives about 70km away in Tshikombane, a village in the Thulamela local municipality, don’t know each other, but both this week related the crushing reality of the implosion of the bank that held their life savings.

Both deposited their money in VBS to evade thieves at home, only to be fleeced by high-flying bankers, fixers and politicians.

And both spent long nights sleeping on cardboard on the stoep outside the bank’s headquarters, anxiously awaiting news of what had happened to their life savings.

The VBS liquidator found the bankers stole and distributed R2.7-billion over the course of about four years – from cash owned by people like Raphunga and Chauke as well as deposits made by municipalities serving a number of the poorest communities in the country.

While a Terry Motau/Werksmans investigation, undertaken at the behest of the Reserve Bank, identified VBS chair Tshifhiwa Matodzi as the kingpin in the heist, it was the epic failures of bank sentinel and CFO Philip Truter that ensured the fraud perpetrated against Raphunga, Chauke and their community stayed hidden for a number of years.

The VBS crimes gained public traction when Shivambu attacked Treasury deputy director-general Ismail Momoniat in Parliament in June 2018, motivating for the bank to be recapitalised and left to sort out its own issues.

Based on reams of bank statements, banking documents, invoices, tax assessments and hours of interviews, Shivambu’s attacks seem motivated by two themes: the tap of regular payments ranging between R20,000 to R250,000 into his FNB Private Wealth bank account, which suddenly stopped when VBS was put under curatorship, and his dream of establishing an upmarket wine bar in Soweto, which consequently stalled.

In this investigative report, we followed the VBS money as it was earned and deposited – rand by rand – by Chauke, Raphunga and their community. We identified the methods used to steal their money from VBS bank, and continued to follow it through two fronts into the pocket of Shivambu. These fronts are companies Sgameka Projects and Grand Azania, overtly “owned” by Shivambu’s brother, Brian Shivambu.

Our investigation points to a visual symbol of the VBS fraud – Sud Restaurant at the top end of Vilakazi Street, Soweto.

It is a glitzy venue that sells itself as a fine dining experience combined with good local wine. The hangout has been frequented by people hoping to mingle with the likes of Bonang, Cassper Nyovest, Black Coffee and Babalwa.

But Sud Restaurant’s classy veneer glosses over a dark secret – the invitations to and the reputations of these celebrities are a ploy to provide it with a shine of legitimacy.

An allegedly fraudulent R4-million VBS loan, of which R2.1-million was ultimately used, capitalised Sud Restaurant. At least R1.5-million in looted VBS cash – stolen from Raphunga, Chauke and their community – paid various service providers to build and run Sud Restaurant, Scorpio’s analysis of bank statements, documents and interviews with service providers show.

We will not name these service providers who offered what they know. These people are scared to death, each repeating that their employers are “dangerous people” who will take “revenge”.

Scorpio traced at least R3.6-million in VBS loot that was used to demolish Sud’s predecessor, Nambitha, to pay for architects, builders, building material, interior decorations and the salaries of the chef and staff.

Bank statements, on the one hand, and insiders, on the other, will tell you that Sud Restaurant’s true majority ownership seems to lie with Floyd Shivambu.

He has worked hard to distance himself from the brand of Grand Azania since his VBS skeletons tumbled into the open. But business people have funded his wedding and the rent for his luxury house in Bryanston through Grand Azania.

Scorpio further established that the bank card connected to the Grand Azania account followed Shivambu through southern Africa, paying for his travel expenses, luxury items, food and high-flying lifestyle.

SMS and email notifications of payments out of Grand Azania were sent to Shivambu’s cellphone and service providers for miscellaneous jobs, which were paid with descriptions like “Mhani Floyd” or “Floyd wedding”. “Mhani”, we could identify, was involved in the demolishing of Nambitha and the building of what would become Sud Restaurant.

The bulk of the expenses for setting up the restaurant seems to emanate from this Grand Azania account, as well as Sgameka Projects.

It is clear that Scorpio does not have a complete picture yet, as we seem to be missing an account holding operational expenses and income.

(Available documents do not prove rumours of Julius Malema’s involvement, despite the former involvement of family member Tsholo Malema in managing Sud Restaurant. Both Malemas previously remained tightlipped about each other’s involvement and the true ownership of Sud.)

Sud Restaurant is a very political environment which members from the ANC and EFF frequented. Floyd and Julius always act as the main kahunas there.

The restaurant was to be named Grand Azania, but it was changed to Sud Restaurant because of the negative exposure around the VBS fraud and Scorpio’s reports that the bank account linked to the company named Grand Azania acted as a front for Shivambu.

A select number of Stellenbosch businessmen the deputy leader of the EFF consulted while visiting their homesteads will tell you that Shivambu has had two longstanding dreams.

The one all-encompassing dream is to be rich. The second is to have an upmarket wine bar.

Sud Restaurant seems to be Floyd’s attempt at combining those two dreams.

Based on Scorpio’s incomplete information, Sud Restaurant was mainly funded through two accounts – that of Sgameka Projects and Grand Azania, fed by looted VBS cash – and the allegedly fraudulent R4-million VBS “loan”.

(The Motau/Werksmans investigation found these “loans” to VBS beneficiaries were not loans in reality but just another way to steal funds.)

Several sources working at Sud Restaurant, some of its service providers and those familiar with the broader Shivambu environment confirmed sections of our investigation as well as of the money flows.

From Sgameka Projects’ Classic Business account at VBS Mutual Bank, dated June 2017 to July 2018, Scorpio identified that at least R252,500 in VBS money was used for Sud Restaurant in that:

• A R250,000 payment effected on 16 August 2018 described as “Nambitha” was sent to LLP Attorneys;
• R1,500 was paid towards the “demolition” of Nambitha;
• Another payment of R5,000 dated 29 August 2017 is described as “Nambitha” and was sent to Brian Shivambu’s personal Nedbank account; and
• R1,000 was paid on 13 September 2017 to “demolition” at “Vilakazi”.

From Grand Azania’s FNB Gold Business bank statements dated November 2016 to April 2018 and June to August 2018, Scorpio could identify that at least R1.24-million in VBS loot was paid to various service providers to build and run Sud Restaurant. These include:

• The former Nambitha restaurant in Soweto is rented from the Vilakazi family. About R134,950 in VBS loot was paid towards rent for Nambitha, demolitions and building material;
• Between 2 October 2017 and 18 June 2018, at least R178,800 in VBS money was paid towards and for the restaurant’s head chef. This includes accommodation payments and a monthly salary of R30,000;
• At least R80,000 was paid towards security for the property; and R29,000 was paid to Adega Mida for fridges.

Initial capitalisation in Sud Restaurant came thanks to the VBS loan. Because Brian Shivambu did not qualify for the R4-million business loan, he ceded, with the help of VBS bank managers, an “investment account” containing an allegedly fictitious R4-million to the bank against which he could borrow. If proven by the Hawks, this will probably amount to fraud.

The loan was never serviced – which is another unlawful act. Brian conceded to not having paid any instalments on the loan – interest that Raphunga, Chauke and their community could at least have used to begin to recoup what had been stolen from them.

These schemes make the Shivambu “loan” a quintessential example of how “business” at VBS Mutual Bank was conducted, and why the bank imploded.

The Shivambu brothers previously denied any wrongdoing. For this particular article, neither commented on questions sent to them this week.

On paper, Brian Shivambu seemed to be the owner. Last year, in an online interview Tsholo Malema – describing herself as a “hustler and an entrepreneur” – seemed to claim credit for and ownership of Sud Restaurant.

People who worked with her, however, described her as “clueless” about the business, and “just the face” to get celebrities involved.

The business was perpetually cash-strapped, in part because Floyd Shivambu regularly authorised large amounts of cash from Grand Azania’s account to be sent to his FNB Private Wealth account. He used both his private account and the Grand Azania account to spend big on luxury brand items and clothes.

Sud’s perpetual liquidity problem seems to be, in part, the reason for an ownership shuffle, insiders say.

Indications are that Tsholo Malema is not involved in the business any more, and Companies and Intellectual Property Commission documents indicate that a company named Sud Restaurant was registered in March this year with Brian Shivambu and businessman Clifford Masinga as the directors.

“Sud Restaurant is a very political environment which members from the ANC and EFF frequented,” a source working there claimed. “Floyd and Julius always act as the main kahunas there.”

VBS depositors Raphunga and Chauke eventually received their life savings, R13,000 and R63,000 respectively, back from the Treasury, courtesy of the taxpayer. The National Treasury aimed to refund depositors up to R100,000 of what they lost. Raphunga and Chauke tell stories of people who died without ever receiving their stolen VBS money.

Many others who had more than R100,000 deposited, did not receive the balance. Our inside pages offer a view on who has been arrested and charged in an attempt to hold them to account so far.

Philip Truter, the failed sentinel, is the only one to have pleaded guilty. He indicated that he would turn state witness. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.