VBS Mutual Bank is now being liquidated. An investigation revealed a R2bn fraud allegedly perpetrated by the directors, politicians and auditors.Picture: ANTONIO MUCHAVE/SOWETAN
VBS Mutual Bank is now being liquidated. An investigation revealed a R2bn fraud allegedly perpetrated by the directors, politicians and auditors.Picture: ANTONIO MUCHAVE/SOWETAN

Activists emboldened by an Eastern Cape court recently dissolving a municipal council for failing in service delivery are taking aim at two Gauteng councils for their involvement in the VBS Mutual Bank scandal, among other allegations.  

The #Ma-Afrika applicant, which is a registered political party according to its court papers, wants the high court in Johannesburg to dissolve the Merafong and West Rand municipalities for illegally depositing funds with VBS Mutual Bank.

Despite Treasury regulations forbidding deposits into mutual banks, Merafong had deposited about R50m, while the West Rand district municipality deposited about R46m.

The bank collapsed in 2018 after it was placed under curatorship as a result of a liquidity crisis. An investigation revealed an initial R2bn fraud allegedly perpetrated by the directors, politicians and auditors.

The bank is now being liquidated.

The #Ma-Afrika party has also asked the court to order the provincial government to appoint an administrator for the municipalities followed by the Electoral Commission of SA holding fresh elections within 120 days.

It also cited other instances of maladministration and corruption in the municipalities as well as lack of action against officials involved with VBS Mutual Bank investments.

More decisive role

The party wants the court to play a more decisive role in holding the two municipalities to account for “their failure to stick to their constitutional mandates and provide necessary services to people”.

It referred in its application to the precedent-setting judgment on the municipal council of Makhanda, formerly Grahamstown.

Two weeks ago, the high court in Makhanda, in a case brought by local activists, ordered the provincial government to dissolve the Makana council and go to fresh elections in 90 days.

The judgment was seen to set a precedent  for judicial intervention in local government, which is at the coalface of service delivery.

Given the Makhanda judgment and the state of local government, there could be more such applications when municipalities fail to do their jobs.

“The judgment has given power to the poor unlike in the past when it depended on the will of the province to invoke sections 139 and 156 of the constitution to assist a municipality to function or be dissolved and be replaced by an interim administrator,” the party said.

Castro Ngobese, spokesperson for Lebogang Maile, Gauteng co-operative governance MEC, said the department was looking into the matter.

He said it had not yet been decided whether the department would oppose the #Ma-Afrika party application.

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