The great tragedy of the VBS Mutual Bank scandal is that a group of gluttonous people set out to willfully rob thousands of poor people of their money, which was then spent wastefully to exhibit an extravagant lifestyle.
The poor who banked with VBS are panicked and bewildered by what happened, and sadly cannot be assured of the appropriate remedy — getting all their money back and seeing the perpetrators face the full might of the law.
The only silver lining in the appalling saga is that the amount that was looted was not higher than the estimated R2bn.
Had VBS’s directors succeeded in their plan to solicit R1bn from the Passenger Rail Agency of SA (Prasa), it would have meant further raiding of the state-owned company already besieged by state capture.
There was also a scheme allegedly discussed with leaders of some evangelical churches to get their congregants to deposit money into VBS to increase its cash flow. Mercifully, the lid was blown on the looting before this came to pass.
The fraud and corruption perpetrated at VBS, which included bribery to ensure massive deposits into the bank from municipalities in Limpopo, as well as the cover-up facilitated by KPMG, will be a major test for the Hawks and the National Prosecuting Authority (NPA).
The criminal justice system is in a state of dysfunction, deliberately crippled by political interference and bad leadership in the police, NPA and intelligence services.
With the country in the clutches of massive public and private sector corruption, the criminal justice system is the only available counterforce against this spectrum of crime, from the capture of our state to illicit activity at Steinhoff, the biggest incident of fraud in SA corporate history.
But the criminal justice system is in a state of dysfunction, deliberately crippled by political interference and bad leadership in the police, NPA and intelligence services.
While the Hawks is now in a process of recovery under the leadership of advocate Godfrey Lebeya, the NPA remains unstable and barely functional as President Cyril Ramaphosa continues to vacillate over the appointment of a new national director of public prosecutions. It is understandable that Ramaphosa is being cautious on this appointment, considering the disastrous history of the NPA, but as long as there is no permanent national director, the criminal justice system will remain paralysed.
With the release of the explosive Reserve Bank forensic report into VBS, compiled by advocate Terry Motau and Werksmans Attorneys, the Hawks and NPA have a guideline for their case, with witness accounts of what happened as well as a full list of recipients of dodgy payouts from the bank.
Although the Hawks and police have to verify the evidence and interview witnesses themselves, the forensic data offered to them by the Bank can almost serve as crib notes to construct solid cases.
But even with some of the legwork having been done, the police and NPA do not have a great track record in prosecuting complex commercial crime cases.
The problem is further compounded by the fact that the prosecutor leading the Hawks and NPA team on the VBS case,advocate Marijke de Kock, appeared to misunderstand why the Bank appointed the Motau investigation.
Reserve Bank deputy governor and CEO of the Prudential Authority, Kuben Naidoo, commissioned the forensic investigation into the affairs of VBS in April. This was in compliance with the Financial Sector Regulation Act, and not because the central bank was on its own fishing expedition.
Even before Motau completed his investigation, it became obvious to the Bank that there was collusion between VBS and KPMG to deceive the Bank about the liquidity status of the institution. The Bank therefore laid charges against the VBS directors and KPMG two months ago for using fraudulent audit statements to mislead it.
This should have been a straightforward prosecution that could have seen the main players in the VBS saga, including KPMG auditor Sipho Malaba, already in the dock. Instead, when the matter was presented to the NPA, De Kock wrote to the Bank questioning why the forensic investigation was appointed and warning that it could impede future prosecutions.
This response betrays a lack of understanding of the legislation dictating the process when financial institutions are in distress, as well as a disregard of the clear case of fraud presented to the prosecutor.
De Kock has a history of dithering on such cases.
In 2016, former NPA head Shaun Abrahams removed De Kock from the team dealing with the case involving prison officials and facilities management company Bosasa after she failed to effect a prosecution for six years. The Special Investigating Unit handed over its report on the Bosasa matter to the NPA in 2010 but no action was taken.
Abrahams was apparently of the view that De Kock was directly responsible for the delay. It is therefore worrying that De Kock has now been entrusted with the VBS case, which requires swift and ultimately successful prosecutions.
The VBS case has drawn much public attention because of the brazenness of the bank heist and the high-profile names that feature on the list of people who were paid exorbitant amounts of money. These include VhaVenda king Toni Mphephu Ramabulana, who has now offered to pay back any tainted money, ANC Limpopo deputy chair and mayor of the Vhembe District Municipality, Florence Radzilani, and provincial treasurer Danny Msiza, as well as Brian Shivambu, the brother of EFF deputy president Floyd Shivambu.
But the politics aside, this case needs to be dealt with effectively because the VBS heist is symptomatic of the shameless corruption that preys on the poor. Irrespective of who the perpetrators and collaborators are, this case will be critical in re-establishing the credibility of the criminal justice system and bringing the thieves to book.
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