The South African Municipal Workers Union (Samwu) in Limpopo wants ANC provincial chairperson Stan Mathabatha to come clean about contentious investments made by municipalities in VBS Mutual Bank before the party’s conference this weekend.
The tiny bank first rose to prominence when it loaned then president Jacob Zuma R7.8 million in 2016 to repay state money improperly spent on his private home.
It was placed under curatorship by the SA Reserve Bank in March following reports that the mutual bank was facing a liquidity crisis after Treasury instructed municipalities to stop investing with the bank. A number of councils withdrew more than R1 billion from the bank after Treasury gave the order early last year.
The issue of the bank has now become a central point of dispute in Limpopo, where the ANC will hold its elective conference on Friday. It is set to be marred by controversy.
Samwu, a mouthpiece for the province’s 27 municipalities, accuses Mathabatha of being tight-lipped about the investments into the failed bank, while two regions – Waterberg and Peter Mokaba – threatened to interdict the conference.
The union said in an open letter that Mathabatha, also the province’s premier, dodged the matter since the national Treasury revealed the investment with the controversial bank was “toxic”.
Samwu provincial chairperson Sello Manayama said it was a shame the union’s meeting with cooperative governance MEC Jerry Ndou about the matter yielded nothing.
“Our municipalities are collapsing. They are unable to discharge their full potential in service delivery issues because the investment has rendered them penniless.
“This is not a war, but we believe the premier and his MECs cannot watch from the fence when their municipalities collapse. They must explain how they plan to redeem the affected municipalities from drowning in debt,” said Manyama.
The municipalities that invested in the bank include Fetakgomo with R210 million; Lepelle Nkumpi with R151 million; LIM345 with R122 million; Ephraim-Mogale with R82 million; and Dr Ruth Segomotse Mompati with R100 million.
The Vhembe district municipality, for example, invested 57% of their operating budget, which amounts to R311 million, while the Greater Giyani municipality invested R158 million or 52.27% of their annual operating revenue.
The municipalities have invested R1.5 billion despite advice by Treasury not to.
The call by Samwu has opened a can of worms for Mathabatha who hopes to get re-elected for a second term as chairperson.
Peter Mokaba and Waterberg threatened to interdict the conference, following allegations that they were not in good standing. The threat was, however, quelled by a member of the national executive committee (NEC), Thoko Didiza, who pleaded with the regions to withdraw, since Peter Mokaba and Waterberg were put under the control of a regional task team structure.
Yesterday, ANC provincial spokesperson Aluwani Netsianda said the conference would continue despite the threats.
“The contentious matter by Samwu is currently receiving attention from the government. We are equally disturbed by the investment saga. But as for the postponement of the conference, the allegations do not hold water,” said Netsianda.
Mathabatha’s spokesperson, Kenny Mathiba, said the premier had instructed the provincial treasury to conduct forensic audits in the municipalities that invested with VBS Mutual Bank. He said the audit would start in the next two weeks, and last for six months.
“What we can promise you is that heads are going to roll here. Several municipal managers that we questioned said they invested without the approval of their municipal mayors or treasury. We want to know who instructed them to invest and why,” said Mathiba.
Mathiba said Mathabatha was not reluctant to comment about the investments.
“He is very worried and needs results as soon as yesterday.”