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BANK HEIST

‘Mercedes kickback’: VBS corruption case postponed to January, accused on bail

‘Mercedes kickback’: VBS corruption case postponed to January, accused on bail
VBS Mutual bank (Photo: Antonio Muchave | Wikipedia)

Two former officials in Limpopo’s Lepelle-Nkumpi Local Municipality and an alleged middleman are the latest to be arrested for the VBS Mutual Bank heist, bringing the total number of arrests to 32.

Lepelle-Nkumpi Local Municipality’s former municipal manager Thabo Ben Mothogoane and its former chief financial officer, Rosina Mangaka Ngoveni, as well as Thapelo Molathlegi, director of STG Financial Solutions, were the latest suspects to be nabbed for their alleged role in the looting of VBS Mutual Bank (VBS).

Following their brief appearance in the Lebowakgomo Magistrates’ Court last week, Molathlegi was released on R35,000 bail, Mothogoane was given R40,000 bail and Ngoveni was released on R15,000 bail.

The three were arrested by the Directorate for Priority Crime Investigation (Hawks) on 30 October 2023 for their alleged role in the approval of an unlawful R150-million investment with VBS by the Lepelle-Nkumpi Local Municipality.

The accused are charged with two counts of contravening the Municipal Finance Management Act (MFMA) and four counts of corruption.

According to National Prosecuting Authority (NPA) Limpopo spokesperson Mashudu Malabi-Dzhangi, investigations revealed that between November and December 2017, the accused allegedly authorised the unlawful investment and acted in a grossly negligent way in contravention of the MFMA by investing R150-million with VBS, which was never repaid.

“It is alleged that Molathlegi acted as a commission agent for VBS; he also received corrupt benefits of more than R2-million, and Mothogoane received a Mercedes Benz to the value of over R1-million and cash amounting to R100,000,” Malabi-Dzhangi said.

Hawks spokesperson Colonel Katlego Mogale said the municipality was prohibited from placing any deposits, inclusive of any investment deposits with VBS, according to the MFMA.

“Molathlegi acted as an intermediary between the Municipality and VBS Mutual Bank. He accepted an amount of R2,246,575.34 from the VBS officials by influencing them to act in a manner that amounts to the illegal, dishonest, unauthorised, incomplete, or biased exercise, carrying out or performance of any powers, duties or functions arising out of a statutory, contractual or any other legal obligation, to the solicitation of R150-million deposit into VBS,” said Mogale.

Lepelle-Nkumpi Local Municipality is one of many councils entangled in VBS’ web of deception and corruption.

Between 2015 and 2018, some 20 municipalities deposited R3.5-billion at VBS and withdrew R2-billion. When the bank crashed in March 2018, 15 of these municipalities had a collective R1.5-billion in the bank. They lost it all.

Also read in Daily Maverick: Audit reports show how VBS got its claws into municipalities

In 2018, VBS was declared insolvent and bankrupt and placed under curatorship, with South African citizens defrauded out of roughly R2-billion. It was formed as the Venda Building Society in 1982 and became a mutual bank in 1992.

On Monday, 6 November, Hawks spokesperson Brigadier Thandi Mbambo told Daily Maverick that at least 32 arrests have been made in connection with the VBS scandal, with investigations still under way.

The first person to be sentenced in the VBS scandal was Phillip Truter, the disgraced former chief financial officer of VBS. He reached a plea agreement with the State and was sentenced to seven years’ imprisonment. Truter will also testify against his co-accused in the R2-billion fraud case.

Last month, former Thulamela Local Municipality manager, Hlengani Emmanuel Maluleke, was sentenced to five years in jail, suspended for the same period, for his role in the approval of an unlawful investment of municipal funds in VBS Mutual Bank.

The Lepelle-Nkumpi Municipality case has been postponed until 23 January 2024. DM

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