The Great Bank Heist makes for pretty good reading if you can get past some of the legalese. Needless to say, many of those named in the report have indicated they intend to apply to the courts to have parts of the report set aside. It’s a tale of unbridled theft by VBS Bank executives and hangers-on, to the tune of R2 billion.
Adv Terry Motau SC, who compiled the report with Werksmans Attorneys, has told his would-be litigants: bring it on. He clearly expected this response. But we know from the preamble to the report he had some heavyweight forensic teams on his side. Anyone taking on Motau in court had better have a damn good case.
There are some heroes that emerge from this saga. One of them being Mariette Venter, acting chief financial officer at Capricorn Municipality.
She “stood up to immense pressure and managed to force VBS to return the municipality’s funds to it. She was unfairly suspended from her post as a result and pilloried as a racist who did not want to invest public monies in a Black bank,” says the report.
She stuck to the letter of the law, and the law to her mind was very clear: the Municipal Finance Management Act (MFMA) regulations restrict the way in which municipalities may invest funds. They may only deposit money with banks registered in terms of the Banks Act, which precludes depositing into mutual banks. Clearly, VBS did not qualify to receive Capricorn funds, and Mrs Venter made this plain to the bank’s representatives.
Further, the MFMA says “investments shall only be made with institutions with a BBB or higher rating investment grade rated by Standard and Poor’s or Moody’s”. Only the CFO may make a decision as to where to invest, based on the above restrictions.
So Mrs Venter made it clear she wasn’t buying what VBS was selling. Various efforts were made to persuade her that her interpretation of the law was wrong. Mrs Venter did not budge. She was referred to as that “white lady” and accused of being a racist because she did not want to support a black bank. Mrs Venter did not budge. She applied the letter of the law.
Then she went on leave. The mayor of Capricorn seized the moment and, whish, R60 million was deposited into VBS. Mrs Venter came back from leave and realising what had happened, set about trying to recover the money. She was given the runaround by the bank. Only when she threatened to inform the Reserve Bank did VBS return the money.
Let the report tell the story: “During December 2015, in Venter’s absence, some R60 million had been deposited in VBS at the instance of the Mayor of Capricorn. During June 2016 Venter experienced considerable difficulty in extracting the funds that had been deposited at VBS, despite having given written notice prior to the expiry dates of the deposit terms that the funds were required to be repaid to Capricorn. She received the run around from various bank officials, including Philip Truter (CFO of VBS Bank). However, when she threatened to refer the matter to the Reserve Bank, the funds were repaid.
Venter’s intervention came at considerable personal cost: she was put under considerable pressure by the then Mayor of Capricorn, Gilbert Kganyago, who told her in no uncertain terms that all investment decisions fell within his sole domain. “The Mayor was clearly wrong in that regard. After Venter had successfully obtained the return of the monies from VBS she was rewarded for her efforts by being suspended from her post, albeit for a supposed unrelated matter. The suspension was lifted unceremoniously about a week later and Capricorn refrained from making any further deposits with VBS, making it one of the few municipalities in Limpopo that did not find itself in serious financial difficulty when VBS was placed under curatorship.”
Mrs Venter did her job (was fired, then re-hired), and saved the municipality R60 million.
In other words, Mrs Venter is a hero.
VBS achieved considerable success in convincing other Limpopo municipalities to part with money. The report introduces us to Kabelo Matsepe, a “political fixer” and Tshifhiwa Matodzi, chairman of VBS Bank.
Matodzi was insistent that the “white lady” was incorrect in her interpretation of the MFMA regulations. Matodzi, VBS chairman, invited Matsepe, the “fixer”, to do “consulting” work for the bank. This involved Matsepe introducing municipalities to VBS and if “the municipality invests” Matsepe would earn a commission calculated at 2% per annum on the amount of each transaction. Matsepe took up the offer with alacrity and his company, Moshate Investments Group, then became a middleman for VBS. In the subsequent period until the time when VBS went into curatorship, Moshate received almost R27 million from this arrangement, paid into the “Robvet account” of which he was an apparent beneficiary.
Matsepe introduced the mayors, municipal managers and CFOs of several municipalities to VBS. “He said that simply by virtue of those initial introductions, which took place at an event held at the Ranch Hotel in Polokwane, he earned a commission on every deposit of funds subsequently made by those municipalities, including the occasions when funds already deposited were rolled-over after the term of the deposit had expired.”
Now we meet the provincial treasurer of the ANC in Limpopo, Danny Msiza. When VBS organised events at the Ranch Hotel outside Polokwane, it was Msiza who did most of the talking. Matsepe, the “fixer”, denied that Msiza played any significant role in VBS’ affairs. “However, it is clear that Msiza intervened on numerous occasions when his political influence was required. I have little doubt that Matsepe, despite his self-importance and bluster, in fact works for Msiza. (Ntendeni) Nemabubuni (sales manager at VBS) colourfully, and I believe accurately, described his impression of the relationship between Matsepe and Msiza in the following terms: ‘He was obviously working for Danny (Msiza), and its just that Danny didn’t want to be working on this thing on a daily basis, so he just appointed this small boy to run around.'”
The lesson in this is clear: if we had an army of Mrs Venters in this country, the likes of VBS Bank wouldn’t get out of the starting blocks.