The seven men who were this week arrested for their alleged involvement in the VBS Mutual Bank scandal, have been granted bail of R100,000 each.
The men pleaded poverty in court and begged Magistrate Brian Nemavhidi to set their bail at a lower amount. But Nemavhidi was not buying it.
“The accused pleaded poverty before this court, informing the court that the quantum of bail should not be seen as a punitive measure or a deterrent. It should be an amount which will secure their attendance at court,” he said, in handing down his ruling.
“I believe the applicants are trying to stretch the hand of this court.”
VBS chair Tshifhiwa Matodzi made his first appearance before Nemavhidi in the Palmridge Regional Court, east of Johannesburg, on Thursday morning. He was joined by the bank’s chief executive officer, Andile Ramavhunga, and former general manager of treasury Phophi Mukhodobwane. Also in the dock were non-executive directors Ernest Nesane and Paul Magula, both from Public Investment Corporation, and Phalaphala Ramikosi, who was the police’s former chief financial officer (CFO), as well as KPMG accountant Sipho Malaba.
The men were taken into custody on Wednesday, following a cross-province search and seizure operation that saw the Hawks swoop on ten properties in Gauteng and Limpopo.
They stand accused of a raft of 47 charges – including racketeering, money laundering, theft, fraud and corruption.
According to the indictment, the accused operated as an enterprise to gain “overall control of the financial systems of VBS”.
“The primary purpose of the enterprise was to enrich the members and associates through the theft of money from the general pool of funds in VBS,” it read, “The theft of the money was covered up through various acts of fraud and money laundering”.
During a press briefing on Wednesday afternoon, the national head of the Hawks, Lieutenant-general Godfrey Lebeya, indicated there was an eighth suspect but that he had been “affected by the Covid-19 quarantine requirements” and so would be brought to court at a later stage.
State advocate Hein Van Der Merwe yesterday identified VBS CFO Philip Truter as this eighth suspect.
In an affidavit deposed to in support of his release, Matodzi – said to have been the “kingpin” – indicated his intention to plead not guilty to the charges levelled against him.
In 2018 and following a liquidity crisis at VBS, the South African Reserve Bank appointed a team of forensic investigators to find out what had gone wrong.
The ensuing report – titled ‘VBS Mutual Bank — The Great Bank Heist’ – revealed “a wide range of criminality in the conduct of the affairs of VBS” and identified Matodzi as “the most central character”.
In it, advocate Terry Motau SC pointed to evidence that Matodzi was “the kingpin in the fraudulent and theftuous conduct of VBS’ business”.
“He, his companies, and his associates have been positively identified as the main beneficiaries of the massive fraud,” Motau said.
But Matodzi on Thursday maintained his innocence.
“I intend to have my day in court and prove my innocence,” he said in his affidavit.
He said, however, that he was not prepared to deal with the merits of the case at this stage
“I was arrested early yesterday morning and have not had a chance to properly consult with my legal representative,” he said.
The investigating officer in the case, Ludi Rolf Schnelle, said while the state was not opposing bail – it did want strict conditions imposed.
Schnelle, in his affidavit, described the charges against the accused as “serious and prevalent”.
Van Der Merwe said the decision to not oppose bail “was not lightly taken”.
“The crux of the matter is that VBS suffered losses of almost R2.3 billion,” he said, “R100,000 might be a lot of money for people who don’t have it but at the time of the commission of the offences at least, the accused all held important positions … They do not live a life of poverty, not any one of them.”
The case is due back in court in October.