It is thankfully not too often that a bank supervisory authority is lied to by a partner of one of the top four global audit firms, which has falsified bank final financial statements in return for monetary gain. Prior to the VBS Mutual Bank scandal it is not something that had happened in SA before. So the fact that the Reserve Bank trusted the annual financial statements as submitted to it by VBS and audited by KPMG on the strength of KPMG’s reputation is understandable. The central bank’s explanation of how VBS was looted and failed under its nose has centred on this defence. VBS was also quite different from many other banks in that what happened at VBS tended to mostly stay at VBS. There were limited interactions with other banks. Money came in through deposits and was paid out to individuals, almost all of whom also had VBS accounts themselves. Millions moving out into accounts with other banks would have raised a red flag at the Financial Intelligence Centre. It was eventuall...

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