Poor will suffer most in VBS saga: Municipal IQ
The poor will be most affected by the VBS Mutual Bank scandal.
That is what Municipal IQ – which specialises in local government data - concluded after a forensic report titled “The Great Bank Heist” was published on Wednesday.
The forensic report‚ compiled by advocate Terry Motau and Werksmans Attorneys‚ goes into detail about how the bank heist allegedly occurred and listed a number of former executives of VBS and its largest shareholder‚ Vele Investments‚ who were the alleged perpetrators and beneficiaries of the crime.
Municipal IQ economist Karen Heese said some municipalities would face financial problems because they had more than 60% of their operating budgets tied up in VBS Mutual Bank. These include the Collins Chabane‚ Dr Ruth S. Mompati‚ Greater Giyani and Lepelle-Mkumpi municipalities.
“None of these municipalities are in wealthy localities and many residents depend on them for indigent support. Ultimately‚ it is the poorest of the poor who will pick up the tab for the shameless corruption in these municipalities‚” said Heese.
The report also recommends that individuals that assisted in inducing municipalities to deposit money with VBS - “whether the maker of the bribes or as the recipient of the bribes” - be criminally prosecuted.
The explosive findings of a damning report into the failure of VBS Mutual Bank reveals how its architects and accomplices stole a bank. Business Day’s Warren Thompson explains what is happening at the bank. Subscribe to TimesLIVE here: https://www.youtube.com/user/TimesLive
Municipal IQ municipal director Kevin Allan said: “It is a grave concern that these municipalities had been warned by National Treasury that such investments were not allowed by the MFMA [Municipal Finance Management Act]‚ but that they still proceeded to place much-needed municipal income into VBS‚ often it seems for a corrupt personal pay-off.”
Using the report‚ Municipal IQ found the amount remaining in VBS from municipal deposits totaled R1‚229bn.
Here is a breakdown according to different municipalities. These are not the only municipalities that invested in VBS Mutual‚ but constitute those with an outstanding balance as of the end of April this year:
Fetakgomo Greater Tubatse Municipality - R245‚1m; Greater Giyani Municipality R161‚6m; Lepelle-Nkumpi Local Municipality LIM355 R154‚9m; Collins Chabane Local Municipality - R122‚4m; Dr Ruth S Mompati Municipality - R101m; Mafikeng/Mahikeng Local Municipality - R84‚9m; Ephraim Mogale Local Municipality - R84‚7m; West Rand District Municipality R77‚3m; Makhado Local Municipality - R62‚7m; Moretele Local Municipality R51‚5m; Merafong Local Municipality R51m; Madibeng Local Municipality NW372 R31‚4m; Elias Motsoaledi Local Municipality - R55‚986; and Vhembe District Municipality - R2‚977.