VBS Mutual Bank.
VBS Mutual Bank.

The South African Reserve Bank's Prudential Authority (PA) has lodged an application in the High Court in Pretoria for the final liquidation of VBS Mutual Bank.

The PA said there was no prospect of entering into any resolution plan for the bank. The application for the final winding-up was lodged on Monday.

“While VBS is currently under curatorship pursuant to a decision taken by the minister of finance on March 10, the PA is of the view that curatorship must now be terminated and VBS must be placed in final winding-up,” it said.

“This is as a result of the fact that VBS is hopelessly insolvent and massive frauds have been perpetrated against it.”

During his maiden medium-term budget policy statement last week, finance minister Tito Mboweni gave the strongest indication yet that the embattled bank could be saved.

Various ANC MPs and those from the EFF have called for the bank, which was placed under curatorship in March after looting by executives led to a liquidity crisis, to be recapitalised.

A damning report by advocate Terry Motau and Werksmans Attorneys, released earlier in October, detailed looting at VBS bank of nearly R2bn and identified the role of political players from the ANC and the EFF.

The PA said it believed the final winding-up of VBS was in the best interests of all parties.

“This will then allow a liquidator to utilise the machinery provided for in insolvency legislation and the Companies Act to effect recoveries, and to follow the recommendations of the investigator who investigated the affairs of VBS and who has prepared a report into VBS,” it said.

The PA expected the application to be heard in the high court on November 13.