How these PIC top guns raked in millions at VBS – report

One man worked in legal counsel and compliance, and the other was the head of risk at PIC. But who cares about compliance and risk when alleged millions are involved?

When VBS Mutual Bank was clearly running itself to the ground, a nonexecutive director could have raised an alarm, but he reportedly did not.

This Sunday’s City Press report might explain why: the director, Paul Magula, allegedly received R5.05 million from Vele Investments, VBS’ major shareholder.

The Public Investment Corporation (PIC) made a cash injection worth R90 million into VBS late last year when the bank invited existing shareholders to buy more shares at the bank. The PIC is a 25% shareholder in the company.

Magula was the executive head of risk at the Public Investment Corporation (PIC) before he was fired for incompetence in April. He was recently suspended from his job as the finance boss of the South African Police Service (SAPS)

Another PIC representative at VBS, Ernest Nesane, could be the “senior PIC executive” alluded to in VBS curator Anoosh Rooplal’s affidavit in support of the liquidation of Vele Investments. The affidavit claimed the executive received some R5 million as well.

Nesane was the executive head of legal, governance and compliance before resigning on Friday after new evidence was made available to the investigators working with the VBS curator.

Who paid who, and how much?

City Press reports that Vele paid Magula R5.05 million between December 2016 and February 2018.

Rooplal’s liquidation application against Vele indicated that Magula received R1.75 million from Vele. Hekima Capital, a company with the same registered business address as Magula’s home address, received monthly payments adding up to R3.3 million until February this year. The Sunday paper notes, however, that Magula was a director of Hekima for a short period in 2016.

City Press suggested a link between these payments and the R90 million PIC paid to VBS, where Magula was a nonexecutive director at the time the payment from PIC was made.

Magula reportedly also received a R4.8 million mortgage from the troubled bank.

Magula has denied getting money from VBS, but preferred to not comment on payments from Vele to either him or Hekima.

today in print