Liquidators told FNB to stop payments as Zuma defaults on VBS loan

Eight years after taking a multimillion-rand loan from now defunct VBS Mutual Bank, former president Jacob Zuma is still defaulting on the debt. 

This week, FNB said it had to partially freeze Zuma's account due to a court order obtained by VBS Mutual Bank liquidator Anoosh Rooplal. 

“FNB was instructed by the high court to place a hold on outgoing payments from [former] president Zuma's FNB account. The account is not closed as incoming payments are unaffected. This instruction from the court results from the process now being managed by the VBS Mutual Bank Bank liquidators, and FNB was legally required to comply. President Zuma's recourse now lies with the courts and VBS Mutual Bank liquidators,” the bank said in a statement. 

Rooplal has been trying to recoup money from Zuma since he was appointed in November 2018 to oversee the liquidation of the bank. In 2022, Roopal won a legal debacle against Zuma, in which the Pietermaritzburg high court gave an order allowing the troubled bank to attach Zuma's assets to recoup money owed.

Zuma took the hefty loan in 2016, months after the Constitutional Court ordered that he should pay back money irregularly used during “security upgrades” at his private home in Nkandla. The court found state funds were used to build structures not related to security purposes, including a visitors’ centre, amphitheatre, cattle kraal, chicken run and swimming pool. 

“The National Treasury must determine the reasonable costs of those measures implemented by the department of public works at the president’s Nkandla homestead that do not relate to security ... The National Treasury must determine a reasonable percentage of the costs of those measures which ought to be paid personally by the [Zuma],” the judgment read. 

The judgment was delivered after the public protector's report during Thuli Madonsela's tenure flagged irregular expenditure in the project which was initially estimated to cost R145m but actually cost the taxpayer R246m, according to Madonsela. 

“More items were added to the project after the concerns were raised in 2009, bringing the cost from the initial R65m, which was the subject of complaint in 2009, to R215m,  which has since been spent, while outstanding work is now estimated at R36m,  bringing the envisaged total cost to R246m,” the report read. 

“The information supplied revealed that at R215m and rising, the cost of security installations at President Zuma’s private residence far exceeds similar expenditure in respect of all his recent predecessors.

“The allegation that President Zuma’s immediate family members also improperly benefited from the measures implemented is substantiated. President Zuma improperly benefited from the measures implemented in the name of security which include non-security comforts such as the visitors’ centre, the swimming pool, amphitheatre, cattle kraal with culvert and chicken run.

''The private medical clinic at the family’s doorstep will also benefit the family forever. The acts and omissions that allowed this to happen constitute unlawful and improper conduct and maladministration,” the report read. 

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