Carol Paton Writer at Large

A R350m credit facility that the Public Investment Corporation (PIC) extended to VBS Bank in 2015 was used to hand out special "loans" to clients that were not monitored for repayment. Officials at the bank also created fake loan applications using the information of existing clients to justify drawing down on the PIC funds, which were then used to plug the growing cash hole in VBS. The details of the defrauding of the PIC form part of the report by advocate Terry Motau into the collapse of VBS commissioned by the SA Reserve Bank and published on Wednesday. Motau’s report revealed blatant theft by executives and gratuitous payments made to a range of politically connected individuals. The PIC’s R350m credit facility was used by VBS to fund its "contract finance" book. About 90% of the loans on the "contract finance" book were nonperforming, VBS executives told the investigation. The contract finance book was kept on an Excel spreadsheet and never integrated into the bank’s operating...

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