At the centre of it: VBS Mutual Bank in Thohoyandou, Limpopo. Picture: ANTONIO MUCHAVE/SOWETAN
At the centre of it: VBS Mutual Bank in Thohoyandou, Limpopo. Picture: ANTONIO MUCHAVE/SOWETAN

The VBS Mutual Bank scandal exposed many anomalies at local government level, including gross dereliction of fiduciary duty to act in the best interest of citizens.

Municipal public accounts committees were sleeping on the job when mayors and municipal managers signed off funds meant for service delivery to be invested in a mutual bank without obtaining authorisation or specialised advice in line with legislation.

Many municipalities constantly receive adverse audit reports, are underperforming or deemed dysfunctional. This calls for the strengthening of their financial management and oversight capacity, and for serious action to be taken when corrupt practices are uncovered.

The law enforcement agencies should act swiftly to pursue those fingered in the VBS “great bank heist”. At face value, there appears to be a case to answer by municipalities and beneficiaries of gratuitous payments and generous gifts from VBS.

The Hawks should build a watertight case for the freezing of all proceeds derived from this callous looting. The assets of those found guilty of pillaging should be expropriated to recover the losses.

Had the  Public Investment Corporation not been as conflicted as it is, a determination could have been made for an interim takeover of VBS and the warehousing of the equity of the alleged wrongdoers with the view to preserve the business and save jobs.

Morgan Phaahla
Ekurhuleni

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