Cyril Ramaphosa's answers to questions on VBS, his son and Bosasa

President says Andile is running a clear and honest business as an advisory service

Transcript of President Cyril Ramaphosa’s replies to oral questions in the National Assembly, Tuesday, 6 November 2018

19.  The Leader of the Opposition (DA) to ask the President of the Republic:

With reference to the statement of The Presidency on 15 October 2018 (details furnished), on what date (a) did he first become aware of the alleged involvement of executives in corruption and looting at the VBS Mutual Bank and (b) did he subsequently take any action in this regard? NUO3254E

The PRESIDENT OF THE REPUBLIC: Speaker and hon members, let me start by thanking you for your indulgence for having been understanding. When I was supposed to answer questions here, I was indisposed, and you were kind enough to kind a postponement of this session to enable me to answer questions today, so I thank you for your understanding.

Shortly after becoming President, I received briefings on various matters by different government departments. One of these briefings was from National Treasury, where I was alerted to alleged corruption at the VBS Mutual Bank. I was informed that the SA Reserve Bank, specifically the Prudential Authority, had initiated an investigation into this matter. In response to my request for a comprehensive report on VBS, I received a briefing from Treasury, as well as from the Reserve Bank, on the report submitted by Adv Terry Motau, just before its public release. The report presents a deeply disturbing picture of theft and corruption on a massive scale.

It is essential that all those responsible for facilitating this fraud and this corruption, and all those who benefited from it, must be held accountable. We call on all the relevant institutions and, in fact, we insist that all relevant institutions must act swiftly to prosecute those responsible but also to move with greater speed to recover the funds stolen from the bank’s depositors. [Applause.]

Most of these depositors are pensioners, old men and women, who had put their life savings into VBS, and there are also stokvels and burial societies who are struggling, as it is now, to bury their dead because their money is lost. It is also the municipalities of various areas in our country.

Action must also be taken against those municipal officials, and in some cases they include political officials, who deposited council funds into VBS, knowing that it was not legal, and whose actions could lead to significant financial losses for those municipalities. It is particularly disturbing that many of the people who have suffered loss as a result of these crimes are the poor rural residents of our country.

It is critical that every effort is made to recover those monies to minimise the losses suffered by the bank’s depositors. For much of its existence, VBS was a good bank for ordinary people, a bank that gave loans and mortgages to people in rural areas – and now, through greed, deception, and theft, that bank has been destroyed.

We take a dim view of those who have been implicated in criminal activity rushing to court to try and hide their malfeasance and not making any effort to apologise to those who have lost money. [Interjections.] What they do is to rush to court and not even have a single word of apology to those who have lost money. The real tragedy of VBS is that money was stolen from those in our society who could least afford it.

It is a tragedy that has repeated itself across several of our state-owned enterprises, SOEs, in municipalities, and with respect to several private companies. For the sake of our people and our economy, I believe that we need to make a decisive break with those corrupt practices and build a new era of integrity and honesty in our public and private institutions.

That is why we must act against those responsible for destroying VBS and for against those – in private companies, in SOEs and in other parts of the state – who are trying to steal our country’s future. I thank you.

The LEADER OF THE OPPOSITION: Speaker, through you to the President: I think I agree with you that what took place at VBS was a complete disgrace. In this particular instance, these are politically connected people who stole money from poor South Africans and stole their life savings, where the rich are protected and they steal from the poor and the unemployed. This culture is pervasive for those who are on the inside, connected to the ANC ... [Interjections.] ... and those who are on the outside, the poor people.

Mr President, here I hold a proof of payment that was transferred to say that R500 000 had to be transferred to a trust account called EFG2 on 18 October 2017. This was allegedly put for your son, Andile Ramaphosa. [Interjections.] Following on that, I have a sworn affidavit from Peet Venter‚ stating that he was asked by the chief executive officer of Bosasa to make this transfer for Andile Ramaphosa.

Mr President‚ we can’t have family members benefiting. [Interjections.] I would want to ask you‚ right here today‚ that you bring our nation into confidence and please set the record straight on this matter. Thank you very much. [Applause.]

The PRESIDENT OF THE REPUBLIC: Speaker and the hon Maimane, this matter was brought to my attention. It was brought to my attention some time ago. I proceeded to ask my son what this was all about. He runs a financial consultancy business, and he consults for a number of companies‚ and one of those companies is Bosasa ... [Interjections.] ... where he provides services on entrepreneurship, particularly on the procurement process. He advises both local and international companies.

Regarding this payment, I can assure you, Mr Maimane, that I asked him at close range whether this was money obtained illegally‚ unlawfully - and he said this was a service that was provided. To this end‚ he actually even showed me a contract that he signed with Bosasa. [Interjections.] The contract also deals with issues of integrity‚ issues of anticorruption, and all that.

The SPEAKER: Order! Order, hon members! Let’s listen to the President’s answer. [Interjections.]

The PPRESIDENT OF THE REPUBLIC: On this one, I have made sure that I get as much information as I can.

An HON MEMBER: Really?

The PPRESIDENT OF THE REPUBLIC: He is running a clear and honest business as an advisory service, as he has been trained as a consultant with his business science qualification. I have had no idea or inkling whatsoever at what he has informed me, that this money was obtained illegally. If it turns out – Mr Maimane, I can assure you if it turns out that there is any illegality and corruption in the way that he has dealt with this matter, I will be the first, the absolute first, to make sure that he becomes accountable ... [Interjections.] ... even if it means ... [Applause.] ... I can assure you, even if it means that I am the one to take him to the police station. That I will be able to do. [Interjections.]

I am clear about that, and I can let you in on something else. I have told my children that you do not do any business with a state-owned enterprise. You do not do any business with government. That is what I have told them. [Interjections.] Yes, they listen to me, but I do know from time to time some of these errors and some of these activities can surface. The filter that I want you to know I apply, as their father, is that if there is any illegality, if there is any corruption, I am going to be the first one to take them to jail myself, if need be. That I will do. [Interjections.] I will not allow that. That is what I want you to know.

The SPEAKER: The hon Molebatsi? The hon Molebatsi? What’s happening? Can I call on the hon Magadla?

The PRESIDENT OF THE REPUBLIC: Alright, Madam Speaker, if there is no further question, that is nice. [Laughter.]

The SPEAKER: So, these were false? Alright. Hon Malema?

Mr J S MALEMA: Speaker, through you to the President: We wrote a letter to the hon Blade Nzimande to ask him if the VBS paid R3 million to the Birchwood Hotel for the SACP conference. [Interjections.] We are expecting him to answer truthfully and honourably.

The point I would like to make, hon President, is that if the answer you gave is an acceptable answer to your colleagues, then the same answer stands with Brian Shivambu. [Interjections.] It cannot be that if it is your children with contracts and invoices and they can account for the work they have done, it is acceptable, but when it comes to Brian Shivambu, it is a different matter altogether. [Interjections.]

My question is the following: This bank, having been formed by the father of the current king, worked very well under the Bantustan and provided services to our people, which commercial banks do not provide to our people. Today, we find ourselves in this situation. Do we close down the school because the principal and the management stole the school fees and not only stole the school fees but vandalised the school? Once we come to the conclusion that they have stolen, they vandalise the school. Do we close the school, or do we arrest the culprits and save the school? [Interjections.] [Applause.]

The PRESIDENT OF THE REPUBLIC: Madam Speaker, that is a good question, but before I get to that, hon Malema, let me come back to this one. The question that was asked by the hon Maimane about my son, Andile, has nothing to do with VBS. I think that should be clear. It has to do with Bosasa. So, he has not been involved in VBS. VBS is a different matter. [Interjections.]

I think the question that the hon Malema raises is a very good question: Do we close down the school because the principal has been involved in shenanigans and what have you? Clearly, the answer to that is no. I am one of those, hon Malema, who have a great deal of affection for and almost loyalty to the VBS. I have known about VBS since way back because it operated in the place where my parents grew up and where I am from originally. The problem with it is that it is laden with a great deal of debt. The only way to clean it up is to put it into liquidation. However, the notion, the idea, of a VBS, in my view, should remain alive because that is a bank, as you correctly say, that served people in the rural areas, that served the poor, and that is a bank that many poor people in the rural areas had a great deal of confidence in, much more than many other banks.

I would say, in the end, we should revive VBS, maybe to raise it from the ashes and re-establish a VBS which is clean, which will operate along the principles that the original VBS was established for. Once we have cleaned up this mess, I would support that VBS should be re-established and should rise from the ashes. So, I agree with you on that score. [Interjections.] You should be applauding, Ntate Malema. Hau! [Laughter.]

Mr A M SHAIK EMAM: Speaker, through you to the President: What is very clear is that after many people in South Africa loot, steal, rob, do everything, from and to the poorest of the poor, we only tend to find out much later.

The question is the following: Do you not believe there is a weakness in the system if we find out at a stage after the money has already been taken and stolen? Secondly, based on allegations – many people have paid a very high price in this House – that a public representative in this House received R16 million in his account for a person that was owning a spaza shop a week before and nobody questioned it, shouldn’t there be some consequences or suspension from this august House for a person of that calibre who did not question how R16 million came in? [Interjections.]

The PPRESIDENT OF THE REPUBLIC: Speaker, with regard to pre-emptive action that needs to be taken, I think we have done very well in terms of looking at the Auditor-General’s Public Audit Amendment Bill, making sure that we give the Auditor-General teeth so that if the Auditor-General finds there is any form of malfeasance or corruption taking place, it should be able to take action on a proactive basis without waiting, as the normal auditing process happens that they take action later on. That in itself is going to begin to address the issues that you are raising, hon Shaik Emam, because if we are able to see wrong being done and step into the breach and stop it, all the better.

With regard to members who are represented here being involved in these matters or being suspended or whatever, I think we have to rely on the Rules of Parliament. The ethics processes in Parliament should be able to deal with these matters. Speaker, you are the over-lady of all these matters, and your ethics committee should be able to deal with these matters of things that are wrongly done by Members of Parliament. Thank you very much.

Mr S N SWART: Speaker and hon President, the ACDP is in agreement that what happened at VBS is indeed a tragedy. In a more general sense, what is concerning is that such rampant theft, fraud, and corruption have repeated itself, as you indicated, across state-owned companies, SOCs, municipalities, and state departments. We are indeed facing a severe breakdown in basic morality. We welcome your call for a decisive break to build a new era of integrity in our institutions. There is indeed a need for intervention. All of us need to take responsibility.

Hon President, can faith-based organisations, including churches, not play a much greater role in instilling a culture of honesty and integrity in our nation, and should we not be embracing faith-based organisations to start preaching about integrity and honesty, given the moral crisis that we are facing when it comes to looting and pillaging? Thank you.

The PRESIDENT OF THE REPUBLIC: Madam Speaker, I think we should be clear that the state-owned enterprises are not the only preserve of such horrible activities like acts of corruption and malfeasance. Even in the private sector, we have seen unbelievable acts of corruption, theft, and malfeasance. You just need to name Steinhoff. You just need to name a few of these companies. They are also involved in such.

Clearly, the real challenge for us as a nation is the issue of morality, the issue of integrity, and when these activities take place, they actually are an attack on the moral fibre of our nation. That is where all of us have to play a role. It is not only faith-based organisations that should play a role. Political parties themselves must play a role by adhering to their value system. Each political party will claim that they operate on the basis of integrity and all that, but these things still happen. We need to get all sectors of society to recommit itself to good behaviour, to good morals, to integrity, and to making sure that the moral culture in our country is well promoted.

I have been very keen to meet with faith-based organisations to discuss this very issue with them. So, your statement in this regard falls on very fertile ears, as far as I am concerned, because it is one of those issues that I would like to discuss with them and ask what we should do or what more we can do as a nation. What role can faith-based organisations play in helping to lift the moral fibre of our nation, the integrity of people, as a whole? So, in the coming weeks, that is exactly what I would like to do. All of us need to play a role. [Interjections.]

Yes, the criminal justice system must play its own role. One of the challenges that we face, of course, is that when these things happen, people who are victims of this become impatient because they see the criminal justice system moving far too slowly. They see people who have been involved in acts of theft just moving around freely without any accountability happening around them. [Interjections.] That is where, for instance, we need a criminal justice system that is more precise, that is very quick in acting, so that we can re-instil the confidence of our people in their criminal justice system. That is where maybe a discussion with faith-based organisations will also help because they have a contribution to make. Thank you very much for coming up with that. Thank you.

Source: Unrevised Hansard, 6 November 2018