The Democratic Alliance in Limpopo has welcomed the decision by the provincial government to investigate the municipalities that invested in VBS Mutual Bank, but said it was too little, too late.
Yesterday, treasury MEC Rob Tooley and cooperative governance MEC Jerry Ndou introduced the forensic investigation team to municipal managers, mayors and chief finance officers of municipalities that invested millions in the bank.
The team have three months to complete the investigation into the affected municipalities. A comprehensive report on the findings will be submitted to Premier Stanley Mathabatha’s executive council.
The investigation is expected to determine whether the affected municipalities contravened any legal provisions when they invested funds in the bank.
About 15 municipalities in Gauteng, North West and Limpopo invested money in the liquidated bank amounting to R1.5 billion.
Most of these municipalities are in Limpopo.
According to the terms of reference determined by the National Treasury, the investigation would include the terms of investment to the bank, the amount, the period and dates of investment, interest earned, if any, and the funds invested – equitable share conditional grants or own revenue.
The team is also expected to probe how and why the investments were made, what processes were followed and whether these were inconsistent with the Municipality Investment Policy, Municipal Finance Management Act (MFMA) and the Municipal Investment Regulations.
It is also expected to find out if any officials involved in recommending investments received any incentive.
The forensic team will submit a monthly report when requested by Treasury and or the Limpopo provincial government.
But the Democratic Alliance, which has accused the Mathabatha administration of acting slowly since the VBS saga came to light, said it was a case of closing the stable door after the horse has bolted.
DA member of parliament and provincial leader Jacques Smalle said his party addressed the VBS investment saga when it became clear the ANC government was taking its time, having instituted criminal charges against accounting officers in May.
“We are further of the opinion that mayors who allowed these investments to proceed should be removed from office as they were wilfully negligent in their duties in terms of section 52 of the MFMA,” said Smalle.
“The section clearly states that a mayor of a municipality must provide political guidance over fiscal and financial affairs of the municipality, monitor, and to the extent provided for in the Act, oversee, the exercise of responsibilities assigned to the accounting officer and chief financial officer.
“The deposits made by the municipalities also violated Municipal Investment Regulations, which stipulate the instruments in which municipalities are allowed to invest municipal funds.
“We are, however, pleading with the forensic team to be transparent in their investigation and asking Ndou to expose implicated officials and politicians and hold them accountable.”