ON THE MONEY
STUART THEOBALD: High-flying VBS executives drive their super cars right through Bank’s roadblocks
Will VBS Mutual Bank be the second bank in SA’s modern financial history to see its executives in prison? The last banker to go to jail over a bank collapse was Jeff Levenstein, former CEO of Regal Treasury Private Bank, which fell into curatorship in 2001. He was sentenced to eight years for fraud, The Regal case looks like small fry compared with VBS. As the curatorship of that bank unfolds, it is emerging that its executives and shareholders used it as a money machine to fund lifestyles of super cars, boats and even a helicopter. Depositors consisted of a mix of rural savers, many saving through stokvels, and municipalities, which had illegally deposited money meant to fund service delivery. Their money was siphoned out of the bank into loans to shareholders and related parties to splurge. Those loans, some in the hundreds of millions, had no prospect of being repaid. The bank even made up deposits, which were then used to pay for other businesses that its main shareholder, Vele ...
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