R730m Recovered from VBS Scandal
by Kelebogile Matlou
Nearly R730 million has now been clawed back from the wreckage of VBS Mutual Bank, the South African Reserve Bank’s Prudential Authority (PA) said in its latest annual report. The amount, confirmed by VBS Mutual Bank liquidator Anoosh Rooplal, represents almost a third of the approximately R2.3 billion looted through fraud and theft. Advocate Terry Motau’s 148-page report “VBS Mutual Bank: The Great Bank Heist,” released in October 2018 exposed the large-scale corruption and resulted in 29 criminal cases, with nine matters currently before the courts.
VBS Mutual Bank was placed in final liquidation in November 2018. “Collection efforts on the loan book are ongoing, with significant progress achieved to date. The current focus is on securing further recoveries for the benefit of the proven creditors,” said the PA in its report.
image: SABC NEWS PAGE
Since taking over the bank’s affairs, Rooplal has made payments to creditors. In 2022, he paid R159 million, which amounted to 7 cents in the rand to proven concurrent creditors. In December last year, he paid R458 million, which constitutes 20 cents in the rand. These two payments brought the total distributed to creditors to R617 million.
Rooplal said on Monday that the process was ongoing, but the significant dividends have been paid. Meanwhile, there is still no court date set for the liquidation application of Ithala SOC Limited (Ithala Bank), according to the PA’s report. “The liquidation application is still being ventilated,” the Reserve Bank clarified on Monday.
“The matter will only become ripe for hearing after all parties have filed their respective papers. As such, there has been no communication from the court regarding the outcome of the application, said the Reserve Bank. In January, the PA filed an application for the provisional liquidation of Ithala Bank, alleging that the institution was unlawfully accepting deposits. The application is being opposed by Ithala Bank, the Ithala Development Finance Corporation, and KwaZulu-Natal’s MEC for Economic Development.
image: Business Tech
This move followed the PA’s appointment of a repayment administrator to transfer deposits held by Ithala to a registered banking institution. The PA said that the progress was hindered by a lack of interest from registered institutions and co-operation by Ithala. “The PA and the repayment administrator have since held regular engagements with relevant stakeholders to find a solution for transferring the deposits as quickly as possible in parallel to the liquidation application,” the report said.
Following the PA’s provisional liquidation filing, Ithala’s deposit accounts were frozen. “To preserve the funds and prevent it from using depositors’ funds for other operational purposes,” the Reserve Bank said.
