VBS Mutual Bank saga: Municipality invested various amounts

The West Rand District Municipality (WRDM) invested various amounts with VBS Mutual Bank over a period of two years.

At the time of the appointment of a curator early in 2018, VBS held R76 million of WRDM’s funds. These funds were earmarked to be spent on grants received from Provincial Government. When the investment accounts were opened, the Chief Financial Officer (CFO) confirmed that is was within the legal framework to open an account with VBS.

In August 2017 the Reserve Bank emailed a circular to affected municipalities advising them that it was illegal to invest in a Mutual Bank. WRDM Municipal Manager denies having received such a circular.

The Democratic Alliance is in possession of an email circular that makes it clear that it is illegal to invest with VBS. This circular was emailed to the CFO and a senior person in his department. The DA will submit a motion of no confidence at the next Council meeting, demanding an investigation and suspension of the Municipal Manager and the CFO. The DA will also submit a motion to insist that life-style audits be conducted of the Mayoral Executive members, the Municipal Manager and senior management of administration.

The list of municipalities as prepared by the curator indicates that Merafong Local Municipality (MLM) invested with VBS Bank and at the time of the appointment of a curator, an amount of R50m was invested with VBS. Press reports over the past weeks linked the CFO of the WRDM to the investments by MLM while the CFO was the Acting Municipal Manager at MLM.

The DA has laid criminal charges against the Municipal Managers and CFOs of all 14 municipalities that have invested money with VBS and will continue following up on mismanagement of money meant for service delivery.

We will ensure that the true facts behind these investments and possible payments of commission will be investigated, and disciplinary and criminal action will follow where appropriate.