SA’s prosecutions authority says it has strengthened its case against the former bank executives accused of looting the now defunct VBS Mutual Bank in Limpopo of about R2bn, mostly belonging to the poor.
The National Prosecuting Authority (NPA) clinched an important victory after reaching a plea agreement with the bank’s former CFO, Philip Truter, on Wednesday, in the first criminal conviction since the bank was placed in liquidation almost two years ago.
Truter was sentenced to 10 years’ imprisonment, of which three years was suspended for five years, resulting in him effectively having to serve seven years in jail.
He was accused number three in a case brought against eight people and was instrumental in the saga as his responsibilities as CFO, according to the original indictment, included controlling and operating VBS’s banking systems and controlling its financial records.
NPA spokesperson Sipho Ngwema said the conviction strengthens the case against Truter’s seven co-accused.
VBS, which was a relatively obscure mutual bank in the former Venda homeland, made national headlines in 2016 when it emerged that it had lent former president Jacob Zuma more than R7m to repay the state after former public protector Thuli Madonsela found that he had used government money for upgrades to his personal home in Nkandla.
Three years ago a forensic investigation conducted on behalf of the Reserve Bank’s Prudential Authority detailed the extent to which the bank had been looted by everyone from its executives to its auditors, as well as political players and municipal officials.
Co-accused
Truter was charged together with former VBS chair Tshifhiwa Calvin Matodzi; CEO Andile Ramavhunga; former treasurer Phophi Mukhodobwane; former Public Investment Corporation executives Thifhelimbilu Ernest Nesane and Paulus Nnditsheni Magula; former chair of the audit committee at VBS Phalaphala Avhashoni Ramikosi; and former KPMG partner Sipho Malaba.
A trial date has not yet been set down, Ngwema said.
Truter pleaded guilty to charges of fraud, corruption, money laundering and racketeering and has undertaken to co-operate with the state’s case, which was investigated by elite crime-fighting unit the Hawks and guided by the NPA.
The agreement saw years shaved off from the minimum sentencing Truter would have served if he had been found guilty of the crimes.
Ngwema told Business Day that Truter would be a section 204 witness in terms of the Criminal Procedure Act in the case, meaning he is obliged to answer any question put to him, whether by the prosecution, the accused or the court, notwithstanding that the answer may incriminate him.
"He was complicit and active during the VBS debacle and has decided to come clean," Ngwema said in a statement on Wednesday.
Ngwema said SA’s law enforcement agencies always encouraged whistle-blowers or accused persons who want to come clean to make a full, frank, honest and open disclosure about their involvement and their ill-gotten gains.
"There are times where, especially in the realm of corruption, when law enforcement will need the co-operation of insiders," the NPA spokesperson said.
Ngwema said further legs of the VBS investigation by the Hawks and the NPA were progressing well.
The focus on the executives was only one leg, while there is also a focus on municipal officials and politicians involved in the fraud that became known as the "Great Bank Heist".
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