Date: 08 April 2021 By: Anton van Zyl
In December 2018, after Limpopo Premier Stan Mathabatha had received an explosive report commissioned by the province’s treasury department into the dealings of the local municipalities with VBS Mutual Bank, he assured residents of the province that he would do everything in his power to ensure those who had violated the country’s laws ended up in orange overalls.
“Our commitment to the people of Limpopo is that we will ensure that the recommendations from this report are implemented in full,” Mathabatha said. “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,”
“This report, together with the findings, will be handed to all the affected municipal councils for necessary attention and relevant action,” he said, adding: “We expect that these municipal councils will do the right thing.”
More than two years later it appears that few, if any, of the municipalities involved had done “the right thing”. In the case of Collins Chabane Municipality, the municipal manager, Tsakani Ngobeni, only vacated her post in February this year. The Council did not want to say whether she had received a golden handshake or whether she had resigned.
But the recent arrest of Ngobeni must have sent shivers down the spines of several politicians and municipal officials. Ngobeni appeared in court four weeks ago on charges related to the looting of VBS Mutual Bank. The municipalities that had illegally invested money in the mutual bank have, however, done little to nothing to act against the transgressors.
The Vhembe region has four municipalities and one district municipality. Out of these, the Vhembe District Municipality (VDM) had invested the most, namely R1,07 billion, of which VDM could not recover R300 million. Collins Chabane had invested R120 million and could not recover any of that. Makhado Municipality had invested R155 million and when the bank was liquidated, R53,53 million was effectively “lost”. Thulamela Municipality had invested R30 million but had recovered this money before the bank folded. Musina Municipality did not invest in VBS.
More details emerged the past few months to help complete the puzzle of how VBS was looted - and how the politicians pressurised officials to make illegal investments. Documents filed in various court cases provide interesting insights into the wheeling and dealing that preceded the bank’s liquidation. These reports also reflect an alarming lack of accountability, as very few steps have been taken against the people who either took part or stood by watching as the bank was plundered.
To better understand what was happening at the time and how the looting unfolded, looking at the manner in which one local municipality, Makhado, handled their investments helps.
The Makhado Municipality had several municipal managers (MM) as well as acting managers in the period that the VBS investments were made. In April 2016, when the first R15 million was invested, Isaac Mutshinyali was the MM. At that stage, the municipality was riven with infighting, with Mildred Sinyosi being appointed as the new mayor. But Mutshinyali did not form part of the new mayor’s strategy and he was suspended and did not sign off on the 2016 investment. At the end of May 2017, the Council withdrew all charges levelled against Mutshinyali (who later denied any knowledge of investments made with VBS during his tenure) and offered him a golden handshake.
Johannes Kanwendo, the MM in place when most of the investments were made, later became the “scapegoat” for the fiasco. He was suspended in November 2018 for his role in the saga. Kanwendo told forensic investigators that he had been instructed by the mayor at the time, Sinyosi, to invest with VBS. During his period as MM, Ms P Makhubela was the CFO and, for a time, Mr R Radzilani acted as CFO.
If Kanwendo’s version of events is correct, political pressure was exerted on officials not to do due diligence and to ignore certain procedures. Kanwendo did not sign off on the investments.
Radzilani confirmed Kanwendo’s sentiments and claimed that political pressure had been applied to invest with VBS, saying he had had no choice but to sign the documents. He was also very “uncomfortable” with investing money in VBS, believing it to be a risk.
A central character in the saga appears to be the CFO, Ms Mikateko Palesa Makhubela, who signed off on all the investments. When interviewed by the investigating team, she denied that any political pressure had been exerted on officials to invest with VBS, saying it was her decision. She said she had misinterpreted the legislation and had thought that investing with a mutual bank was in order. She and Mr G Raliphada, Manager of the Budget for the municipality, admitted that, in certain cases, procedures were not followed and money was transferred to VBS without the necessary signed documents.
Makhubela’s name, however, features in several court documents, especially in the case where prominent ANC leader Danny Msiza took on the curator of VBS, advocate Terry Motau. Motau filed transcripts in court of WhatsApp messages to indicate that Msiza had played a central role in the looting of the bank. In one of these conversations, Makhubela is seemingly involved in an argument with Kabelo Matsepe, who is described as “a politically connected fixer” in Motau’s original report. Matsepe became a very well-remunerated middleman and acted as a gatekeeper between VBS and the municipalities, according to Motau.
One such WhatsApp conversation seemingly concerns a “100” (presumably R100 000) that must be divided between Makhubela, the “1st lady” and the “deputy”. “So I get 33k out of all my efforts ... pls u Giyani u must make it up to me,” was Makhubela’s response.
Makhubela resigned early in 2018 to take up a position at the Greater Tzaneen Municipality, where she is still the CFO. The last investment was made on 20 July 2017, when the money was transferred, but the paperwork was only signed weeks later, on 14 August 2017.
The mayor at the time, Mildred Sinyosi, denied that investments were ever discussed with her and said that she had made no input into investment decisions. She also denied knowing that statutory processes had not been followed and background checks on the bank had not been done.
Makhado Municipality invested R 101 467 110,61 with VBS Mutual Bank. When the bank was liquidated, the amount still owed to them, with interest, stood at R53 532 889,39.
In the report that the premier referred to, a recommendation was made that the Makhado Municipality act against Mr I Mutshinyali, Mr N Kanwendo, Ms M Makhubela, Mr N Radzilani and Ms E Lubisi (Manager: Assets Management). Sinyosi was also found to have failed to comply with legislation and she had not performed the oversight role required of her.
Sinyosi was removed as mayor and is currently serving as an ordinary councillor in the Makhado Municipality. As far as the named officials, only Ms E Lubisi still appears to be employed by the municipality.
Questions were sent to the Makhado Municipality’s spokesperson, Mr Louis Bobodi, two weeks ago, asking what steps the municipality had taken in line with the reports, taking into consideration the assurances by the premier that action would be taken.
“In terms of the VBS saga, the matter is still before the curatorship, and as the municipality we are still awaiting for the curatorship to finalize the process,” said Bobodi last week. The municipality did not want to comment further as “the matter is before the law enforcement agencies.”
Anton van Zyl has been with the Zoutpansberger and Limpopo Mirror since 1990. He graduated from the Rand Afrikaans University (now University of Johannesburg) and obtained a BA Communications degree. He is a founder member of the Association of Independent Publishers.