The first case of municipal officials implicated in the VBS scandal to go on trial hit a snag yesterday due to the defence lawyers saying they have not received the documentation to proceed.
The trial of Charlotte Ngobeni, a former municipal manager at the Collins Chabane local municipality, and Eddie Makamu, a former CFO at the same council, is expected to set the ball rolling on criminal prosecutions of state officials involved in the scandal.
The duo appeared briefly in the high court sitting in the Palm Ridge magistrate’s court on Thursday.
Ngobeni and Makamu were involved in making the municipality deposit R120m into the VBS. They both face two counts of contravention of the Municipal Financial Management Act. Ngobeni further faces four counts of corruption.
According to the NPA’s indictment, the Collins Chabane local municipality adopted an investment and cash management policy which came into effect on June 2 2017.
That policy restricted the municipality to placing deposits with banks registered in terms of the Banks Act, which did not include VBS.
But on October 23 2017, Ngobeni and Makamu made an interest-bearing fixed deposit of R120m to be placed into VBS for a period of three months.
Ngobeni then enjoyed benefits which flowed from the illegal deposit.
According to NPA spokesperson Lumka Mahanjana, there are five other cases involving municipal officials enrolled in different courts in Gauteng, North West and Polokwane.
“There are still a number of municipal matters under investigation of which further info cannot be disclosed at present,” Mahanjana said.
On October 28 2017, Kabelo Matsepe, a director of a company called Moshate Investment Group and also a former prominent member of the ANC Youth League in Limpopo, paid over R51 000 for Ngobeni’s accommodation, meals, beverages, spa treatments and spa products purchased by the accused at a boutique hotel in Morningside.
“On 31 October 2017, a credit facility in the amount of R1.38m was made available... for the acquisition by accused 1 of a Range Rover Velar 3.0 DSE motor vehicle, which facility had been declined by VBS on the grounds that accused 1 could not afford the repayments and had an inadequate credit score,” the indictment read.
Matsepe also purchased a Tag Heuer ladies wristwatch at the Mall of Africa for R28 500 for Ngobeni.
VBS failed to repay the deposit of R120m together with accumulated interest to the Collins Chabane local municipality.
A report by Advocate Terry Motau, titled The Great Bank Heist, found that executives at both VBS Bank and its majority shareholder, Vele Investments, devised a plan to defraud the bank. A total of R2.3bn was looted from the bank.
In March 2018, the SA Reserve Bank placed VBS under curatorship.
Anoosh Rooplal, the curator of VBS, said the process of recovering money is still ongoing.
“The bank will remain in liquidation until we exhaust all efforts to collect all assets. The main challenge is the fraud. As you know, there was massive fraud perpetuated at the bank. It was so pervasive. People took out money and to try and recover that is quite a legal process.
“Whoever owes the bank money... and whoever was a beneficiary of the fraud... we will try and work with relevant authorities to recover money from them,” Rooplal said.
In the first quarter of 2022, R110m out of the total of R159m had been paid back to the 13 municipalities that illegally invested in the bank. The remainder had been paid to service providers and corporate clients of the bank.
He added that where criminal proceedings regarding identified funds which flowed from the VBS fraud, and those funds will also be pursued.
dlaminip@sowetan.co.za
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