The VBS bank scandal made headlines again this week when Tshifhiwa Matodzi, former chairman of the VBS Mutual Bank board, pleaded guilty in the Gauteng High Court on Wednesday to 33 counts of corruption, theft, fraud, money laundering and a pattern of racketeering activities.
Matodzi was sentenced to 495 years – or 15 years on each count. The sentences will run concurrently, so he will only serve an effective 15 years behind bars. This will serve as cold comfort to the victims of the elaborate almost R2-billion bank heist, who have not and are never likely to recover financially.
Read more in Daily Maverick: VBS heist: Six years on, victims still bear brunt of looting
A report by advocate Terry Motau and Werksmans Attorneys, compiled for the SA Reserve Bank, showed that the amount of R1,894,923,674 was gratuitously received from VBS by around 53 “persons of interest”, both natural and juristic, over the period 1 March 2015 to 17 June 2018.
Netting Matodzi is a big coup for the NPA, and potentially a huge problem for the VBS crooks. It is unclear at this stage whether Matodzi will turn State witness, but based on the plea deal and the relatively lenient sentence, our sources think it is likely.
Based on Daily Maverick investigations into VBS, Matodzi’s cellphone and email records seem vital in solving several riddles.
Indications are that Matodzi was the directing brain behind the theft, and also made away with most of the stolen funds.
More important, though, is that Matodzi gave instructions to his right-hand man, treasurer Phophi Mukhodobwane, as well as to CFO Philip Truter.
These instructions ranged from breaking the banking system to which accounts kickbacks should be sent, and why. We know this because authorities mirrored Mukhodobwane’s telephone during their investigation and we have limited access to their chats.
If Matodzi’s phone was indeed mirrored, as we understand from sources, that would have been done fairly recently.
An important secret kept by Matodzi would be how important Danny Msiza, former ANC provincial treasurer, was to the VBS scam.
Read more in Daily Maverick: VBS theft – the case against Limpopo ANC’s Danny Msiza and Florence Radzilani
Motau found Msiza was central to Matodzi’s plans. He is said to have used his political influence as treasurer to coerce municipal officials into investing millions of rands in VBS. Msiza, in other words, was the prime “fixer” of deals between the bank and the municipalities.
Motau said “it is clear that Msiza intervened on numerous occasions when his political influence was required”.
WhatsApp evidence suggests ANC loyalist Kabelo Matsepe, himself a large beneficiary of the VBS theft, often fronted for Msiza in playing the middleman between the bank and the municipalities.
In a WhatsApp discussion on 12 December 2017, for example, Matsepe told Mukhodobwane: “This [municipal manager] is full of shit but Danny is intervening.” Matsepe later said: “Danny just dealt with Elias [Motsoaledi Municipality]. They say first thing in the morning, but its only 35m (sic)”.
Both Msiza and Matsepe are Matodzi’s co-accused and previously denied wrongdoing.
Matodzi may also be expected to turn on Mukhodobwane, who was instrumental in the thieving.
One of the biggest secrets is the involvement of Sgameka Projects—the company owned by Brian Shivambu that fronted for Julius Malema and brother Floyd Shivambu—and why this was a “very strategic account.”
Read more in Daily Maverick: The other side of the VBS puzzle – Matodzi’s WhatsApps reveal purpose and payments to Malema and Shivambu’s slush funds
Matodzi instructed Mukhodobwane to pay R350,000 for “lobbying fees”; R600,000 because “they are undr immense pressure (sic)” and R1-million because “this an extremely strategic account”.
Motau found that Sgameka Projects received R16.1-million, which was divided between Grand Azania and Mahuna Investments, which, based on their expenses and an analysis of the ultimate beneficiaries, were the front companies for Floyd Shivambu and Julius Malema.
Matodzi was clearly the kingpin in the case.
The national head of the Directorate for Priority Crime Investigation (DPCI), Lt-Gen Godfrey Lebeya, hailed the conviction as a testament to the “unwavering commitment and exceptional skills of our team. We have always maintained that we will leave no stone unturned in our pursuit of justice and this outcome reinforces our resolve.
“Let this serve as a stern warning to those who believe they can escape the long arm of the law. The DPCI will not relent in its mission to bring criminals to justice. We are actively pursuing other suspects in this case, and they, too, will face the full might of the law,” said Lebeya.
Up to this point, the most high-profile prosecution in the matter was that of Truter, who took a plea bargain of seven years’ imprisonment and agreed to turn State witness.
In July 2022, businessman Keaobaka Kgatitsoe was handed a five-year suspended sentence and ordered to pay R460,000 for money laundering linked to fictitious invoices submitted to VBS Bank.
In October last year, former Thulamela municipal manager, Hlengani Maluleke, was also handed a five-year suspended sentence for his role in the approval of an unlawful investment of municipal funds in VBS Bank.
Arrests this year
Although one of the higher profile commercial corruption cases of the decade, the wheels of justice have been slow to turn, with many identified from the money trail yet to face the law.
Read more in Daily Maverick: Dissecting the VBS elephant six years on – the R2bn fraud, the R500m settlement and the plight of victims
In March this year, the Hawks’ Serious Corruption investigation team arrested Risimati Hitler Maluleka, Nditshedzeni Mashau, and Zwivhuya Goodness Thishonge in an early morning raid.
Former chief financial officer and acting municipal manager for the Greater Giyani Local Municipality, Maluleke was arrested on charges of contravention of the Municipal Finance Management Act (MFMA), corruption and money laundering.
Mashau, former manager of budget and acting chief financial officer, who is currently the CFO of Giyani, was arrested in the town for contravening the MFMA, and businessman Thishonge (33) was arrested in Thohoyandou on allegations of money laundering.
The trio appeared in the Giyani Magistrates’ Court on 6 March 2024 for their first appearance and bail application. Maluleke was granted bail of R25,000 while Mashau and Thishonge were granted R20,000 bail each.
The case was transferred to the Polokwane Specialised Commercial Crimes Court.
Lebaya said 33 VBS arrests had been effected, with three convictions.
“We are still working on the remaining 43 from the 76 suspects. So far, 2,907 statements have been recorded by the investigation team and investigations are continuing.” DM