VBS MUTUAL BANK
Curator to ask court to secure Vele chief’s assets
The curator of VBS Mutual Bank will head back to court on Tuesday to apply for the sequestration of Robert Madzonga, the CEO of the bank’s largest shareholder, Vele Investments, as part of ongoing efforts to recover money the curator believes was stolen from the bank by its executives and shareholders.
The motion will be heard in the High Court in Johannesburg and follows an earlier motion brought before the courts two weeks ago to have Vele Investments sequestrated for the same reason.
Similar motions are expected to be brought against other former executives of the bank in the coming weeks.
Madzonga is the group CEO of Vele Investments and has previously served as VBS’s chief operating officer.
He was one of five executives named by VBS curator Anoosh Rooplal as being responsible for "orchestrating a fraudulent scheme of such enormity" that it caused losses to VBS Mutual Bank of about R1.5bn — or about 75% of the bank’s assets, according to estimates by Business Day.
Madzonga and the other Vele directors have been accused of stealing money from the bank to fund investments made by Vele as well as to support their lavish lifestyles, which has included buying helicopters, properties and luxury sports cars.
Rooplal described the request to sequestrate Madzonga as being "manifestly urgent" due to the fraud he had perpetrated, benefited from and attempted to conceal.
"It cannot be put beyond them [the perpetrators] to further dissipate and conceal the proceeds of the fraud in their possession," he stated as part of his reasons for Madzonga’s sequestration.
Madzonga has denied any wrongdoing and claims any monies advanced to Vele by VBS was done via arms-length loan agreements.
The curator has acknowledged in the court papers that he is unsure of who was really in control at Vele Investments.
This follows a number of e-mails he received in May from Madzonga and Vele Investments executive chairman Maanda Manyatshe. Manyatshe wrote to Rooplal on May 18, advising the curator he had terminated the services of Madzonga with "immediate effect".
But after getting wind of this communication, Madzonga wrote to Rooplal later the same day advising him that the termination of his services was illegal and should be ignored. Madzonga also disputed whether Manyatshe was an executive chairman, and stated that in any event, his services could only be terminated by the board.