Suspects in the looting of VBS Mutual Bank at the Palm Ridge Regional Court on June 18 2020. Picture: ALON SKUY
Suspects in the looting of VBS Mutual Bank at the Palm Ridge Regional Court on June 18 2020. Picture: ALON SKUY

Two of the seven arrested in connection with the collapse of VBS Mutual Bank have been able to pay the R100,000 bail set by the court.

The National Prosecuting Authority (NPA) confirmed that, as of end of business on Thursday, five of the accused had not paid bail and remained in custody.

The bank’s CEO Andile Ramavhunga; and board member and former CFO of the SA Police Service Phalaphala Ramikosi paid and were released on bail.

It was not yet clear if the other five had managed to pay bail by Friday afternoon.

The Palm Ridge regional court had granted the group, which includes the bank’s top executives, bail of R100,000 each, despite some of the accused pleading poverty.

Others arrested were the bank’s former chair Tshifhiwa Matodzi; 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 (PIC) on the bank’s board, Paul Magula and Ernest Nesane.

VBS CFO, Paul Truter, was not in court as he is in Covid-19 quarantine. He will be added to the indictment next week.

The group is facing a combined 47 counts, including for racketeering, theft, fraud, corruption and money laundering.

These are the first arrests in almost two years since the Hawks’ investigation into the matter started in August 2018.

VBS 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 placed under curatorship after withdrawals by municipalities caused a cash crunch.

The Reserve 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 when it went under.

Five of the bank’s executives have since been sequestrated.