DA requests inquiry by Registrar of Banks into VBS and municipalities which have illegally deposited funds with them

The DA has written to the Registrar of Banks, Mr. Kuben Naidoo, requesting that he immediately establish a Commission of Inquiry into VBS Mutual Bank and municipalities which illegally deposited funds with them.

The dire state of affairs at the institution necessitates an urgent and thorough investigation to ascertain the full extent of the problems at the institution given the increasing number of allegations and the potential loss of billions of rands of municipal deposits.

The  DA urges the Registrar of Banks to establish a similar commission to that set up when the African Bank was placed under curatorship, to expose any further issues not yet publicly known.

This call follows a series of scandals which drew attention to the institution’s dubious conduct:

Municipalities illegally deposited funds at VBS Mutual Bank;

Lawyers were paid “commission” to induce such deposits;

VBS was advised that they were acting illegally in taking such deposits in August 2017, and continued to do so;

The bank recklessly utilised short-term deposits (from municipal funds) to finance long term loans; and

The bank entered into high-value loans with bank officials, shareholders and related individuals/entities.

The terms of reference for this commission should follow similar processes taken by the Registrar in the African Bank instance.

The DA cannot sit by idly, while municipal officials, lawyers, auditors, and bank staff, shareholders and directors squander the resources of municipalities through illegal or risky financial activities.

We will relentlessly continue to hold all individuals and entities who nonchalantly abuse public funds accountable.

The DA will not permit corruption or financial maladministration to cripple service delivery to people on our watch.

Statement issued by Kevin Mileham MP, DA Shadow Minister of Cooperative Governance and Traditional Affairs, 6 May 2018