Banner
For Modifiers (Municipal and Provincial Level) Click here, www.limc.co.za
Batho Pele Principles

Limpopo Provincial Government takes action against Municipalities implicated in VBS

By: Maano Nekhavhambe

Limpopo Province Premier Stanley Chupu Mathabatha said that all officials implicated in the Venda Building Society (VBS) Mutual Bank illegal investment faces possible criminal charges. Mathabatha announced the possible criminal charges during the media briefing held on Tuesday 11 December on the report with recommendations by the forensic investigation into the investment.

 

In June 2018, 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.

The provincial Treasury's forensic audit report confirmed that out of the R2.6 billion invested by municipalities at VBS, the amount still outstanding is R1 082 billion.

The report has also found that municipal officials and political office bearers all admitted knowledge of the Municipal Finance Management Act, the Municipal Structures Act and the Municipal Systems Act.

“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.” Mathabatha said

The Limpopo municipalities implicated in the VBS scandal which also led to the bank being liquidated are Polokwane Municipality, Greater Giyani Local Municipality, Collins Chabane Local Municipality, Makhuduthamaga Local Municipality, Fetakgomo/Greater Tubatse Local Municipality, Makhado Local Municipality, Lepelle-Nkumpi Local Municipality, Elias Motsoaledi Local Municipality, Ephraim Mogale Local Municipality and Vhembe District Municipality.

So far, certain entities have already placed their Municipal Managers and Chief Financial Officers (CFOs) under suspension.

The Provincial Treasury MEC Rob Tooley said there were already three municipalities under awful financial constraints, including the Giyani Local Municipality which had invested just over R148 million into the now collapsed bank.

“Our commitment to the people of Limpopo is that we will ensure that the recommendations from this report are implemented in full. This Report, together with the findings, will be handed to all the affected municipal councils for necessary attention and relevant action. We expect that these municipal council will do the right thing”. Concluded Mathabatha

Vhembe District Municipality Mayor Cllr Florence Radzilani has since resigned in the wake of the briefing by the Premier. Under her leadership, the municipality had invested R1 billion and currently R300 million is outstanding.

Mathabatha assured people of Limpopo province that civil action will be instituted to recover the financial losses suffered by those that invested into the back.