Parliament seeks to uncover extent of damage caused by VBS failure

10 October 2019 - 08:10 By Naledi Shange
A branch of VBS Mutual Bank in Thohoyandou, Limpopo.
A branch of VBS Mutual Bank in Thohoyandou, Limpopo.
Image: File / Antonio Muchave

The portfolio committee on cooperative governance and traditional affairs (Cogta) will, over the next two days, visit municipalities in Limpopo that were affected by the demise of VBS Mutual bank.

A statement released by the committee said the intention was to check the state of service delivery in those municipalities.

“Of major focus will be municipalities that invested in the Venda Mutual Bank (VBS) and those municipalities that have received repeated disclaimer audit opinions. The objective of these interactions are to ascertain the impact of the investments on those municipalities, amounts invested, amounts recovered and what consequence management actions have been taken against relevant officials involved and the impact on the municipalities capacity to deliver services,” the statement read.

In June, TimesLIVE reported that more than R1.6bn of the R2bn invested by 16 municipalities from Gauteng, North West and Limpopo into VBS Mutual Bank could not be recovered.

The bulk of the loss (72%) involved investments made by eight municipalities in Limpopo. Four municipalities suffered losses in North West and two in Gauteng.

The shocking revelation was made by auditor-general Kimi Makwetu in his report on the audit outcomes of municipalities for the 2017/2018 financial year.

He described the non-recovery of public funds invested in VBS as a classic example of the “impact of deteriorating accountability” in municipalities.

The Vhembe District, Makhado and Collins Chabane local municipalities are among the districts the committee will visit.

“On Friday, the committee will hold a public meeting with stakeholders including traditional leaders, ward councillors, civic organisations and rate payers’ associations in Thohoyandou to get first hand experiences on the impact of the investments on overall service delivery,” the committee said.


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