We all thought VBS was in good hands, says deputy finance minister
Opposition MPs castigate the Treasury and Reserve Bank for not acting sooner
Deputy finance minister Mondli Gungubele says there was no reason for regulatory authorities to have suspected early on that the doomed VBS Mutual Bank would be brazenly looted.
“Many of the board members of VBS are chartered accountants, lawyers or other professionals. It is with good reason that Treasury and the Reserve Bank was of the view that VBS was under good hands,” Gungubele said during an urgent ANC-sponsored debate on VBS on Tuesday in Parliament.
During the debate, many opposition parties suggested that the National Treasury and Reserve Bank were too slow to take action despite early signs that something was amiss.
“Banks are regulated to protect depositors … [regulatory authorities] do not manage banks on a day-to-day basis,” said Gungubele. He said, however, the Reserve Bank had in 2017 flagged VBS as high risk after it grew rapidly in three years. Both internal and external auditors had ignored the looting.
“There is nothing black about this, this is theft … it’s criminal. There is no worse way to insult black excellence [than] associating black people with what has happened at VBS. It has nothing to do with black excellence and has everything to do with thuggery,” said Gungubele.
In March, the Reserve Bank placed VBS under curatorship after it faced a liquidity crisis. An investigation was subsequently launched. A number of senior provincial politicians in the governing party were named in the forensic report‚ titled The Great Bank Heist.
The report, which was commissioned by the Reserve Bank, detailed how some of the country’s poorest municipalities and the elderly, who had deposited their life savings in VBS, lost close to R2bn after their deposits were used to fund the lavish lifestyles of individuals linked to the doomed bank‚ including its largest purported shareholder‚ Vele Investments.
It detailed how internal and external auditors, including those from the embattled firm KPMG, turned a blind eye to the looting spree.
Opening the debate, ANC MP Thandi Tobias said that VBS management seemed to be involved in a “self-destruction mission”. She, together with her ANC colleagues, insisted that the bank must be saved, but tough action should be taken against those implicated. “We are not saying ‘save the criminals’ … the criminals must be arrested. We as ANC cannot be perceived to be condoning corruption,” said Tobias.
DA MP and finance spokesperson David Maynier said “this debate is a desperate attempt to divert attention away from the role of the governing party in [the] ‘grand bank heist’ at VBS Mutual Bank”.
“Although National Treasury and the SA Reserve Bank acted, they acted too late, only clamping down several months after it became clear that municipalities were making illegal deposits at VBS.
"That is why we need an independent inquiry into the action taken by the National Treasury and the SA Reserve Bank after they became aware that municipalities were making illegal deposits at VBS Mutual Bank,” said Maynier.
EFF deputy leader Floyd Shivambu, whose brother Brian is said to have received a “gratuitous” R16m from VBS, said the EFF never benefited from the bank and called law enforcement to take decisive action against those involved.
“There must be an attempt by the curator to save the bank and hand it over to the depositors, with the agreement that no single shareholder shall have more than a 2% share of the bank.”
An impression must not be created that “black people cannot run a bank”, said Shivambu.
He said the Treasury did nothing to stop the looting, and the Reserve Bank was aware months before the bank collapsed that municipalities were exposed.
IFP MP Mkhuleko Hlengwa also suggested that the Reserve Bank ignored the looting. “Where was the Reserve Bank [when] the ANC had their hands in the cookie jar?” asked Hlengwa.
UDM MP Nqabayomzi Kwankwa said there is a culture of impunity, especially within government and state-owned entities. “Save the bank and then what … so that the criminals can keep looting state resources and taxpayers' money,” he said.
COPE leader Mosiuoa Lekota said the ANC’s decision to sponsor the debate “smacks of hypocrisy”. “The majority, if not all, of these municipalities that deposited money in VBS are run by the ANC.”