Flashing race card on VBS saga an insult to “black excellence”

Finance Deputy Minister Mondli Gungubele says pulling out the race card amid reports of obscene looting at VBS Mutual Bank is an insult to “black excellence”.

In a debate into the affairs of VBS Mutual Bank in Parliament on Tuesday, Gungubele said the open letter penned by VBS chairperson Tshifhiwa Matodzi in March this year accusing the SA Reserve Bank and the National Treasury of not being welcoming to black-owned banks when the Finance Minister placed the bank under curatorship does not justify the corruption that took place.

The debate comes after lead forensic investigator Terry Motau released an explosive report, dubbed “The Great Bank Heist”, which connected the dots of the looting that took place at the bank.

It listed individuals who were part of a scheme that allegedly involved individuals who were given “commissions” to facilitate illegal deposits by municipalities into the bank.

Gungubele said when VBS experienced challenges, the Reserve Bank tried to help and save depositors and placed the bank under curatorship.

On the 11th of March 2018, the Minister of Finance at the time placed VBS under curatorship following the recommendation of the Registrar of Banks. The decision was taken after months of intensive supervision going back as far as May 2017.

Gungubele said by February 2018, VBS was failing to honour its financial commitments and the Reserve Bank was forced to take action in the interest of depositors in the hope of saving VBS through curatorship.

“However, such action had been accelerated after the Chairman of VBS and Vele wrote an open letter to the Registrar on 9 March 2018, blaming the Reserve Bank and the National Treasury for the failure of VBS rather than the looting that he led and instead blamed a well-organised powerful system, which does not tolerate growing black banks and black excellence.

“And that that black excellence can be viewed as a result of Motau’s investigation.

“There is no worse manner to insult black excellence by allowing it to run a bank in this fashion because there is nothing black about this, this is criminality, this is corruption, this is theft.

“There is nothing black about [it]. There is no better way or worst way to insult black people by associating them with these developments. Blacks are better than that,” he said.

Gungubele said, meanwhile, the facts that were unearthed during the forensic investigation – which were not revealed in line with the terms of reference of the investigation – have been referred to law enforcement agencies for further investigations.

“Some of the detailed findings of the forensic investigation are not in the public domain but have been handed over to law enforcement agencies – the National Prosecuting Authority, National Treasury and the South African Revenue Services – among others, for the purpose of conducting criminal investigations,” he said.

In a heated debate much attention was placed on the fact that EFF Chief Whip Floyd Shivambu’s brother, Brian Shivambu, was implicated in the report, with questions being asked why the EFF defended the bank when the lid was lifted on the fraud that occurred at the bank.

Cooperative Governance and Traditional Affairs Minister Dr Zweli Mkhize said, meanwhile, the VBS report has revealed the complicity of some senior municipal officials through bribes and other malpractices in relation to the invested funds.

He said the report also revealed that more people were aware of this than previously disclosed.

For example that Mayors, Municipal Managers and Chief Financial Officers of several municipalities were introduced to VBS by an agent, who earned a commission on every deposit of funds subsequently made by those municipalities.

This, he said, included occasions when funds already deposited were rolled-over after the term of the deposit had expired.

“The involvement in bribes, theft, fraud and corruption is a criminal offence and we urge law enforcement agencies to ensure that all those responsible for such nefarious activities face the full might of the law.

“This VBS debacle must be made a shining example of what happens to people who steal government funds which are meant for the people. Law enforcement agencies should pursue not only the municipal officials but also those who profited from this wholesale fraud against the poor, who are outside of government.”

He said while government condemns what happened at VBS, the country needs more banks like VBS which are designed to assist the poor and black business, cooperatives and SMMEs who find themselves marginalised by the mainstream banks and other financial institutions.

The transformation of the financial sector cannot be postponed any further.

“What happened at VBS should not be used to stigmatise black professionals or black business owners. There are many black professionals and businesspeople who can establish and run a bank professionally, ethically and with integrity,” he said.


 

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