VBS Mutual bank customers at long queues outside the bank, demanding their money in Thohoyandou, Limpopo. Picture: ANTONIO MUCHAVE/SOWETAN
VBS Mutual bank customers at long queues outside the bank, demanding their money in Thohoyandou, Limpopo. Picture: ANTONIO MUCHAVE/SOWETAN

The Hawks and National Prosecuting Authority (NPA) will provide details on the investigation into VBS Mutual Bank on Wednesday, after eight suspects linked to the collapse of the bank were reportedly arrested.

Investigative journalism unit amaBhungane reported that the eight were arrested on Wednesday morning in a co-ordinated multiprovince search-and-seizure operation by the Hawks and the NPA.

In one of the country’s biggest banking scandals, the VBS Mutual Bank collapsed amid allegations that its executives looted almost R2bn that they were supposed to look after on behalf of municipalities, stokvels and the elderly in Limpopo.

In March 2018, the SA Reserve Bank placed VBS Mutual Bank into curatorship after withdrawals by municipalities— which are legally barred from depositing money with mutual banks — caused a cash crunch.

The Bank then appointed law firm Werksmans Attorneys and advocate Terry Motau to establish reasons for the VBS failure. Municipalities representing some of the poorest areas in the country with shoddy service delivery had about R1.2bn deposited at the bank when it went under.

The report recommended that those implicated face criminal charges, but up until now no arrests have been made.

Five of the bank’s executives, however, have been sequestrated since the banking scandal. AmaBhungane reported that those arrested on Wednesday included the bank’s former chair, Tshifhiwa Matodzi, CEO Andile Ramavhunga, treasurer Phophi Mukhodobwane and CFO Philip Truter.

It reported that “compromised outsiders” were also arrested, which included two former representatives of the Public Investment Corporation to the VBS Mutual Bank board, Paul Magula and Ernest Nesane; as well as another board member, Phalaphala Avhashoni Ramikosi, the former CFO of the SA Police Service; and Sipho Malaba, the former KPMG audit partner, who signed off on the bank's falsified financial statements.

quintalg@businesslive.co.za