Limpopo MEC gives municipality ultimatum over VBS saga

Limpopo MEC for cooperative governance, human settlement and traditional affairs Basikopo Makamu has given the Thulamela local municipality in the Vhembe region an ultimatum.

This is with regard to the implementation of the remedial actions against those who invested municipal funds into the collapsed VBS Mutual Bank.

Makamu, who is also Limpopo ANC deputy secretary, has given the council seven working days to implement the remedial actions as per the recommendations of the provincial Treasury.

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The municipality invested R30 million with the bank. The investment was later deemed illegal and in contravention of the Municipal Finance Management Act [MFMA].

The Act forbids municipalities from investing public funds with a mutual bank.

In 2018, Limpopo premier Stan Mathabatha appointed the provincial Treasury to investigate whether investments made by municipalities into the VBS were within the ambit of the law.

Fifteen municipalities, from Limpopo, North West and Gauteng had invested more than R1.7 billion into VBS. Nine of those were from Limpopo.

As a result, Mathabatha fired seven mayors, whose councils illegally invested with VBS in October 2018. The premier further ordered councils of the affected municipalities to implement the remedial actions of the Treasury recommendations.

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Some of those investigated included municipal managers and chief financial officers, who signed off for the investments.

Makamu said the mayor and the municipal manager for Thulamela municipality were spared because their investment into VBS was returned.

“We have given them a period of seven working days to implement the remedial actions as recommended by the provincial Treasury,” said Makamu.

It is also alleged several mayors and municipal managers who invested with VBS received kickbacks.

Municipal spokesman Ndwamato Tshila yesterday confirmed a council sitting last night gave municipal manager Hlengani Maluleke seven working days to explain why he should not be suspended.