Despite investing more than R1 billion in the collapsed VBS Mutual Bank, some municipal managers, chief finance officers and supply chain management managers from municipalities in Limpopo have continued to collect their monthly salaries, while others received golden handshakes worth millions.
Yesterday, some of those municipalities appeared before the portfolio committee on cooperative governance, led by Faith Muthambi, outside Polokwane.
The committee was baffled to learn officials had been doing business with their own municipalities, tenders were awarded to friends and relatives, and several service providers were paid for work never done.
Muthambi also heard a municipal manager was given a R1 million golden handshake after he was implicated in the illegal investment of R300 million in VBS.
The DA in Limpopo at the start of October alleged that the R1 million was a hush payment over the hundreds of millions improperly invested in the now liquidated bank.
Vhembe District Municipality officials allegedly authorised a R1 million payment as a “golden handshake” to Reuben Rambado, the municipality’s former municipal manager.
“The DA can confirm that the municipality opted to pay Rambado as he was threatening to expose senior officials and politicians who immensely benefited from this illegal investment.”
Mariba alleged the R1 million payment was made to him, or was at the very least authorised, despite a letter that the Limpopo department of co-operative governance, human settlements and traditional affairs (COGHSTA) sent to the municipality stating that they should not consider any settlements for officials implicated in the VBS debacle, “but rather reach a logical conclusion”.
“It is clear that the ANC-led municipality has opted to disregard COGHSTA’s advice and utilised taxpayer’s money to shut Rambado’s mouth before exposing their friends and comrades who benefited from the VBS saga.”
The DA said they only became aware of the alleged settlement agreement during a special council meeting, “and the DA vehemently rejected that this settlement agreement be enforced”.
The Vhembe municipality last year suspended Rambado and chief financial officer Nyiko Machava over the VBS scandal after the municipality invested the R300 million in the bank.
Municipal workers were demonstrating at the time to demand the recall of executive mayor Florence Radzilani, and the suspension of the member of the mayoral committee on finance, Rudzani Ludere, among others.
At the time, it was reported that Rambado was “threatening to spill the beans” and that he would name others involved in the VBS scandal.
That, however, apparently did not happen, which the DA has linked to the R1 million payment.
This was not the first time Rambado has been linked to a controversial golden handshake. In 2004, it was reported that politicians in Limpopo’s then bankrupt Makhado municipality signed a secret R830,000 golden-handshake deal with him.
It was reported that leaked documents indicated that all mismanagement charges against Rambado were to be dropped “in return for his silence” and to resign and leave the town, where he had been on suspension for gross misconduct and mismanagement in a bonus scandal.