VBS-accused fails to have banking law set aside, court orders his sequestration

VBS-accused and political fixer Kabelo Matsepe’s attempts to have a banking regulation declared unlawful failed when the Pretoria High Court dismissed his application. The court has also ordered his sequestration.

Earlier this year, Matsepe, one of the suspects in the VBS Mutual Bank scandal, challenged the validity of the Municipal Investment Regulations, which restrict municipalities from investing in mutual banks.

The regulation relates to the power of municipalities to invest funds, and beyond that, only allows municipalities to invest funds in investment type deposits with banks, as per the country’s Banks Act.

The criminal proceedings levelled against Matsepe in the main VBS case, involving a string of other accused people, rely on the validity of the regulations in questions.

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If the regulations were declared unconstitutional, the case against Matsepe would have been set out and the indictment against him would have fallen away in part, the National Prosecuting Authority (NPA) said.

But the court ruled against Matsepe, effectively allowing the NPA to get on with its criminal charges against him.

Tens of millions for ‘facilitating deals’

Matsepe’s company, Moshate Investment Group, was allegedly paid millions in commission for being a go-between and facilitating deals between municipalities and VBS Mutual Bank.

The company received over R35 million from this arrangement, according to The Great Bank Heist report to the Prudential Authority by Advocate Terry Motau, following his forensic investigation into the collapse of VBS.

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In a separate judgment, a final order to sequestrate Matsepe was handed down, acting in favour of the South African Revenue Service (Sars), which is seeking over R61 million in tax related to tax assessments between 2015 to 2018.

Sars found Matsepe to be factually solvent, but that he would not be able to settle his debts as his liabilities, amounting to R66.9 million, exceed his assets.

It said his liabilities exceed his assets by almost R62 million.

Matsepe’s liabilities comprise a R5.4 million bond from VBS that was registered in 2017 and the R61.5 million owed to Sars.

His assets include two vehicles valued at R115 000 each, and a third vehicle valued at R880 000.

Sars argued that it would be to the advantage of both Matsepe and his creditors that his estate be sequestrated “in the circumstances as there is a reasonable possibility of payment of a dividend to his creditors”.

This article originally appeared on Moneyweb and was republished with permission. Read the original article here.