DOCUMENTS

VBS arrests: municipal officials will be next – Cilliers Brink

Money stolen included about R2bn in municipal funds, most of which is gone for good, says DA MP

DA welcomes VBS arrests and hopes that municipal officials will be next

17 June 2020

Note to Editors: Please find attached an English soundbite by Cilliers Brink MP, DA Shadow Deputy Minister of Cooperative Governance & Traditional Affairs. 

The Democratic Alliance (DA) welcomes the arrest of former insiders of VBS Mutual Bank, as reported by News24 earlier today.

The DA is a complainant in a number of the criminal complaints related to the looting of VBS, and we have been worried about the apparent lack of progress in the case.

The money stolen from VBS included about R2 billion in municipal funds, most of which is unlikely to be recovered.

While several mayors and municipal officials did resign in the wake of VBS-related investigations, many seem to have escaped serious consequences, even as they left municipalities in financial distress.

In at least one case a CFO of a municipality in the North West resigned before disciplinary action could be taken against her, only to reappear in Limpopo a few months later as a municipal manager.

The DA believes that the Municipal Finance Management Act (MFMA) can be a powerful weapon for prosecutors in the VBS case.

For a number of years MFMA investment regulations have explicitly prohibited the deposit of municipal funds in mutual banks. No implicated municipal official can plead ignorance of these regulations.

Section 173 of the MFMA criminalises financial misconduct by municipal officials, and this includes the deliberate or grossly negligent flouting of investment regulations.

But as the DA revealed last week: in the last 14 years only 67 people have been prosecuted under section 173 of the MFMA, of which only nine have been concicted.

While the scope of the VBS case is far bigger than just the municipal functionaries who enabled the looting, the DA believes that the case presents an excellent opportunity to test or at least leverage the criminal sanctions created by South Africa’s municipal legislation.

Issued by Cilliers Brink,DA Shadow Deputy Minister of Cooperative Governance & Traditional Affairs, 17 June 2020