Prasa to ‘invest R1bn’ to bank that lent Zuma cash for Nkandla upgrades

The Passenger Rail Agency of SA (Prasa) is reportedly investing R1 billion with VBS Mutual Bank, the bank that lent President Jacob Zuma R7.8 million in 2016 to repay state funds spent on his controversial Nkandla home in KwaZulu-Natal.

This is despite Prasa being cash-strapped and VBS not meeting the state entity’s investment requirements, Sunday Times reports.

The paper reports that it has seen correspondence from Prasa’s former acting CEO Lindikhaya Zide confirming the rail agency’s commitment to a R1 billion investment with a return of 8.25% per annum. However, Prasa this week denied that the deal had been concluded.

VBS  reportedly sent Prasa a letter this week reminding the state entity to effect payment of the first tranche by close of business on Friday February 2, but Prasa’s acting chief financial officer has apparently refused to release the funds despite “immense pressure” to do such.

A source at VBS confirmed the bank was expecting payment from Prasa by Friday, but denied that the deal was corrupt or meant for Zuma’s benefit or his close friends the Guptas.

“Prasa had agreed to invest R1-billion and it will come in two tranches and the first payment was expected before the end of business  on Friday.

“We are not being used as a conduit for any corrupt activities, this is a pure investment and it will be monitored by the National Treasury and the Reserve Bank. Prasa will get value for their money. This is not money intended for Zuma or the Guptas, it is pure investment,” said the source.

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