Reserve Bank announces forensic investigation into VBS Mutual Bank

13 April 2018 - 13:13 By Timeslive
The South African Reserve Bank building in Pretoria. File photo.
The South African Reserve Bank building in Pretoria. File photo.

A fuller investigation into VBS Mutual Bank has been commissioned by the South African Reserve Bank. This comes after a curator's report signalled possible fraudulent reporting and transactions to extract money from the bank in order to further the personal interests of certain individuals and companies.

The SARB said on Friday the Minister of Finance had appointed SizweNtsalubaGobodo Advisory Services‚ represented by Anoosh Rooplal‚ as the curator of VBS Mutual Bank (VBS)‚ on March 11.

"After a thorough assessment of VBS‚ Mr Rooplal recommended that an independent review of the business conduct of VBS be undertaken. Consequently‚ the Deputy Governor of the South African Reserve Bank and Chief Executive Officer (CEO) of the Prudential Authority‚ Mr Kuben Naidoo‚ has appointed Advocate T Motau SC as an investigator in terms of section 134 of the Financial Sector Regulation Act 9 of 2017 to conduct a forensic investigation into the affairs of VBS."

The primary objective of the investigation that will be conducted by Advocate Motau is to establish whether:

1. any of the business of VBS was conducted with the intent to defraud depositors or other creditors of the bank‚ or for any other fraudulent purpose;

2. VBS’s business conduct involved questionable and/or reckless business practices or material non-disclosure‚ with or without the intent to defraud depositors and other creditors; and

3. there had been any irregular conduct by VBS’s shareholders‚ directors‚ executive management‚ staff‚ stakeholders and/or related parties.

"Based on the findings of the forensic investigation‚ the CEO of the Prudential Authority will take appropriate follow-up action‚" the SARB said.

The Prudential Authority is a juristic person operating within the administration of the South African Reserve Bank. It is responsible for the prudential supervision of banks‚ insurers‚ co-operative financial institutions‚ financial conglomerates as well as certain market infrastructures and for ensuring that these institutions are managed safely and soundly.

BusinessLIVE reported earlier this week that the curator's initial findings indicated that VBS had been "severely mismanaged".

VBS was put under curatorship on March 11 because it was facing a severe liquidity crisis and could not repay deposits as and when required.