09/07/2018 06:20 SAST | Updated 09/07/2018 06:20 SAST

Suitcases Of Cash, Fake Deposits And Fraud... Here's How VBS Was Looted

The curator of VBS has described a "fraudulent scheme of epic proportions".

VBS Mutual Bank

Suitcases stuffed with cash, fictitious deposits and fraud... these were just some of the ways that the owners of VBS Mutual Bank bribed, stole and plundered depositors' money, City Press reported.

A new affidavit filed by VBS curator Anoosh Rooplal on Friday reportedly details the "epic scale" of the theft. Rooplal reportedly applied to liquidate the bank on an urgent basis to salvage what is left of it.

Rooplal reportedly alleged that the directors of VBS and its majority owners, Vele Investments, stole over R1.5-billion from the bank's depositors. Evidence was reportedly also provided by VBS's former treasurer, Phopi Mukhodobwane, who detailed the extent of the fraud.

A "senior executive" at the Public Investment Corporation (PIC), unnamed, allegedly received a suitcase stuffed with R5-million, in exchange for the PIC giving the bank a R350-million credit facility. VBS executives also allegedly paid R1.5-million to executives at the Passenger Rail Agency of SA (Prasa) to facilitate a deposit of R1-billion.

ANC Youth League leaders were also reportedly implicated in the creation of shelf companies used to channel bribes and pressuring municipalities to deposit money into VBS.

The VBS executives allegedly created "fictitious deposits" which were entered into the system. They would then draw cash at the expense of actual depositors, which was used to buy luxury items and buy their other businesses.

Rooplal reportedly described it as a "fraudulent scheme of epic proportions".

Two weeks ago, the Sunday Times and City Press both reported on allegations that bank shareholder (and Vhavenda king) Toni Mphephu Ramabulana, the bank's former chairperson and Vele Investments founder Tshifhiwa Matodzi; and Vele Investments CEO Robert Madzonga, used millions of depositors' money to fund their lavish lifestyles.

The Reserve Bank placed VBS under curation earlier this year, citing concerns over its liquidity. There were also concerns that 14 municipalities had deposited millions with the bank in contravention of the Municipal Finance Management Act.

Meanwhile, ordinary depositors have reportedly been queueing, sometimes in the cold overnight, withdraw R1,000 at a time – all that is allowed at this point. According to Business Day, depositors can only withdraw R1,000 per day now because of the bank's precarious position. Last week, the Reserve Bank announced that it would guarantee deposits of R100,000, after initially saying only deposits of R50,000 or less would be guaranteed.