Two former senior staffers at the Fetakgomo-Greater Tubatse Municipality, Limpopo, and a business owner were arrested on Tuesday for their role in the VBS Mutual Bank scandal that led to the collapse of the bank and loss of depositors money.
Millions of rand belonging to the public was unlawfully invested in the VBS Mutual Bank by municipalities that had been promised astronomical returns.
Many municipalities lost their money after more than R2-billion was stolen from the bank, leading to its collapse in 2018.
All in all more than R1.6bn was lost to the public purse when 14 Limpopo, North West, and Gauteng municipalities went against the rules to invest ratepayer funds with the VBS Mutual Bank.
Some of the stolen money had been deposited by ordinary people including pensioners.
The three suspects aged 57, 39, and 41 were arrested in the morning at their homes in Pretoria.
The allegations in this matter involve the contravention of the Municipal Finance Management Act, 2003 (Act No. 56 of 2003) regarding the unlawful investing of municipal funds with VBS Mutual Bank.
“The investigation revealed that Fetakgomo-Greater Tubatse Local Municipality invested an amount of R230 million – paid in five trenches from 15 November 2016 to 19 February 2018,” said police spokesperson, Brigadier Nomthandazo Mbambo.
“The whole amount invested was never paid back to the municipality.”
The three will appear at Pretoria Specialised Commercial Crimes Court on Wednesday, 17 November 2021. The trio are facing multiple charges including corruption; and money laundering.
