Picture: ALON SKUY
Picture: ALON SKUY

Seven of the eight suspects arrested in connection with the collapse and looting of VBS Mutual Bank appeared in court on Thursday morning.

The group, which includes the bank’s top executives, appeared in the Palm Ridge regional court after the search-and-seizure operation was conducted on Wednesday by the Hawks.

They are facing 47 counts, including of racketeering, theft, fraud, corruption and money laundering.

The state has informed the court that it will not oppose bail for the suspects.

Those arrested were the bank’s former chair Tshifhiwa Matodzi; CEO Andile Ramavhunga; treasurer Phophi Mukhodobwane; former KPMG audit partner who signed off on the bank's allegedly  falsified financial statements Sipho Malaba; two former representatives of the Public Investment Corporation to the bank’s board, Paul Magula and Ernest Nesane; and Phalaphala Avhashoni Ramikosi, board member and former CFO of the SA Police Service.

VBS’s CFO, Philip Truter, was not in court as he is in Covid-19 quarantine.

The bank collapsed amid allegations that its executives looted almost R2bn they were supposed to be looking after on behalf of municipalities, stokvels and elderly people in Limpopo.

A report on the scandal by advocate Terry Motau detailed a criminal enterprise perpetrated at the behest of executives and benefiting politicians who illegally deposited money with the bank in return for backhanders. It detailed how one mayor allegedly pleaded for “Christmas” — slang for a monetary gift — for herself and the speaker of her municipality.

In March 2018, the Reserve Bank had VBS Mutual Bank placed under curatorship after withdrawals by municipalities caused a cash crunch.

The Bank then appointed law firm Werksmans Attorneys and Motau to establish reasons for the bank’s failure. Municipalities in some of the country’s poorest areas with shoddy local services had about R1.2bn deposited at VBS Mutual Bank when it went under.

In 2019, five of the bank's executives were sequestrated.

quintalg@businesslive.co.za