Politicians also under investigation for VBS looting: Hawks investigator

A number of senior politicians are also part of the Hawks' investigation into how VBS Mutual Bank crashed after more than R2bn was looted from the financial institution.

A Hawks officer involved in the investigation, who spoke on condition of anonymity on Wednesday, told TimesLIVE that a number of politicians were being investigated for their alleged involvement in the stealing of VBS funds.

The officer said the investigation into politicians and other individuals who are fingered in the scandal - known as "the great bank heist" - forms the second leg of the investigation.

The first leg of the investigation, which began in 2018, saw the arrest on Wednesday of eight men whom the police regard as central figures in the scandal.

Seven of the men will appear at the Palm Ridge magistrate’s court on Thursday morning after being arrested in Gauteng and Limpopo on Wednesday by the Hawks. An eighth is believed to be in quarantine for Covid-19.

The months-long investigation that led to the arrests was conducted by the Hawks with help from the Financial Intelligence Centre, the South African Reserve Bank and the National Prosecuting Authority (NPA).

"I can confirm that a number of politicians are under investigation. Please note that I am not saying they will be arrested - I am saying that they are under investigation," said the officer.

The officer said there were certain allegations against a number of senior politicians and the team was investigating them.

"That is leg 2 of the investigation. Leg 1 focused on people regarded as central figures. Leg 2 will include the politicians and everyone else who may have been involved."

He declined to name the politicians who are under investigation.

A number of politicians in the EFF and the ANC have been accused of benefitting from millions plundered from the bank.

A series of reports from the Daily Maverick accused EFF president Julius Malema and his deputy Floyd Shivambu of benefitting from VBS funds that had flown into Sgameka Projects, a company owned by Shivambu’s brother Brian.

In March 2017, the Reserve Bank placed VBS under curatorship following cash-flow problems.

The Treasury also became aware at that time that municipalities had invested over R2bn in VBS. It ordered them to stop paying and withdraw their investments. This was because the Municipal Finance Management Act (MFMA) prohibits municipalities from investing in mutual banks.

Municipalities demanded their funds, but VBS was not able to refund many of them.

In October 2018, advocate Terry Motau, who had been appointed by the curator to investigate allegations of corruption, released his "Great Bank Heist" report, which lifted the lid of how senior bank executives - including chairman Tshifhiwa Matodzi, CEO Andile Ramavhunga, treasurer Phophi Mukhodobwane and chief financial officer Philip Truter - allegedly manipulated bank records, created mock asset finance contracts and acquired a number of companies for Vele Investments, also one of VBS’s main shareholders.

Motau’s report also accused each of the executives of personally benefitting from millions meant for VBS.

Many other people have been caught in the VBS web. They include Sipho Malaba, a former partner at auditing firm KPMG. Malaba is accused of cooking VBS’s financial statements for the year ending March 2017.

Others implicated in the scandal include Paul Magula and Ernest Nesane, who represented the Public Investment Corporation (PIC) in the VBS board. The PIC was one of VBS’s shareholders. Magula and Nesane allegedly looked the other way instead of informing the PIC that things were not well at the bank.