Action to be taken against officials involved in VBS saga

Tuesday, December 11, 2018

Limpopo Premier Stan Mathabatha says action must be taken against all municipal officials implicated in the VBS saga and that the monies involved be recovered.

The total amount involved and invested with the VBS was R2.6 billion and the amount still outstanding is R1 082 189 171.68.

Addressing the media in Polokwane earlier today, Mathabatha said all those officials implicated must be arrested.

“We want to see arrests, successful prosecutions and serious jail terms for all those who have violated the law. For our part as the provincial government, we will provide all the necessary support to the law enforcement agencies to bring this matter to finality,” he said.

In June this year, the Limpopo provincial government commissioned a forensic investigation into the investments made by municipalities in Limpopo with VBS Mutual Bank.

The investigations were led by the Limpopo Provincial Treasury and were in line with Section 13(1) (a) & (b) of the Municipal Finance Management Act as well as the Municipal Investment Regulations.

Mathabatha said as the provincial government, they will ensure that the recommendations from the report are implemented in full.   

“Our commitment to the people of Limpopo is that we will ensure that the recommendations from the report are implemented in full,” he said, adding that the report, together with the findings, will be handed to all the affected municipal councils for the necessary attention and relevant action.

“We expect that these municipal councils will do the right thing. In the same vein, we call on law enforcement agencies to support and supplement our efforts to ensure that justice is done without fear, favour or unreasonable delays,” Mathabatha said.

With regard to the recovery of the monies lost at VBS, Mathabatha said it has been recommended that the steps providing for civil recovery in terms of Section 32(1)(c),(d) and Section 32(2) of the MFMA be considered against the municipal managers and the CFOs.

“It is recommended that disciplinary action be considered against the municipal managers in terms of Section 173(1)(a)(iii) of the MFMA Act, in as far as the accounting officers of a municipality is guilty of an offence if that accounting officer deliberately or in a grossly negligent way fails to take all reasonable steps to prevent irregular expenditure,” the Premier said.

In total, 10 municipalities have been implicated in the VBS saga which are:

-       Vhembe District Municipality

-       Makhado Local Municipality

-       Collins Chabane Local Municipality

-       Fetakgomo/Greater Tubatse local Municipality

-       Lepelle-Nkumpi local Municipality

-       Ephraim Mogale Local Municipality

-       Greater Giyani Local Municipality

-       Elias Motsoaledi Local Municipality

-       Makhuduthamaga Local Municipality

-       Polokwane Municipality

Investigations conducted into the VBS saga had revealed that the investments of all the individual municipalities with VBS Mutual Bank were made in contravention of Regulation 6 of the Municipal Investment regulations by investing with an institution which is not registered as a bank in terms of the Banks Act 94 of 1990.

The investments with VBS Mutual Bank were made in contravention of the specific cash management and investment policies applicable in the individual municipalities. – SAnews.gov.za