Limpopo municipalities not affected by VBS curatorship
Neither Polokwane Municipality nor Capricorn District Municipality (CDM) has any current investments with VBS Mutual Bank (VBS) that was placed under curatorship by the South African Reserve Bank (SARB) on Sunday. During February last year, Polokwane Observer reported that Polokwane Municipality invested amounts of R80 million, R50 million and R44 million with VBS during 2016 …
Neither Polokwane Municipality nor Capricorn District Municipality (CDM) has any current investments with VBS Mutual Bank (VBS) that was placed under curatorship by the South African Reserve Bank (SARB) on Sunday.
During February last year, Polokwane Observer reported that Polokwane Municipality invested amounts of R80 million, R50 million and R44 million with VBS during 2016 for a term of 180 days at an interest rate between 8,5% and 8,65%. The investment matured on 14 March 2017 and was not re-invested with the bank.
CDM also invested R120 million at the same bank during 2016 and the funds were withdrawn when it matured.
The audited financial statements of both municipalities for the 2016/17 financial year do no longer reflect any investments with VBS.
Deputy Governor and Registrar of Banks at the SARB, Kuben Naidoo reportedly said at a media briefing on Sunday that VBS has grown from a balance sheet of R150 million three years ago to over R2 billion, mainly due to an increase in municipal deposits. “The bank had over R1,5 billion in municipal deposits,” Naidoo reportedly said.
Municipalities ceased to invest funds at the bank after National Treasury alerted them that the Municipal Finance Management Act (MFMA) does not allow for investments being made with mutual banks as they are not registered in terms of the Bank’s Act and more than R1 billion was subsequently withdrawn.
VBS, with its headquarters in Louis Trichardt, was in the news when it provided a loan of R7,8 million to former President Jacob Zuma to repay the SARB for expenses incurred during upgrading done at his family home in Nkandla.
During the media briefing, Naidoo reportedly confirmed that the largest shareholders of VBS are Vele Investments and the Public Investment Corporation. According to Vele Investments’ website, Toni Mphephu Ramabulana, King of the vha-Venda is its founder.
Attempts to source comment from the management of VBS on Tuesday afternoon proved futile as the listed numbers at the head office in Louis Trichardt were not answered.
Story: BARRY VILJOEN
>>barryv.observer@gmail.com
