A money trail that leads to senior bank management, high-ranking politicians in three different political parties, municipal officials and auditors was laid bare in the shocking affidavit made by former VBS Mutual Bank chairperson Tshifhiwa Matodzi.
Matodzi’s affidavit made headlines on Thursday, 11 July – a day after he started serving his prison sentence, having pleaded guilty to 33 counts of fraud, theft, money laundering and racketeering.
He was sentenced to 15 years on each count, or a total of 495 years. But the sentences will be served concurrently and he will serve only 15 years – and he may well be released early on parole like his co-conspirator, Philip Truter, who got a seven-year sentence and was released in April after serving just three and a half years.
The affidavit has caused a stir because of its detailed description of how Matodzi and other senior management looted VBS Mutual Bank. It also includes details incriminating municipal officials and high-ranking politicians.
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A money trail that leads to senior bank management, high-ranking politicians in three different political parties, municipal officials and auditors was laid bare in the shocking affidavit made by former VBS Mutual Bank chairperson Tshifhiwa Matodzi.
Matodzi’s affidavit made headlines on Thursday, 11 July – a day after he started serving his prison sentence, having pleaded guilty to 33 counts of fraud, theft, money laundering and racketeering.
He was sentenced to 15 years on each count, or a total of 495 years. But the sentences will be served concurrently and he will serve only 15 years – and he may well be released early on parole like his co-conspirator, Philip Truter, who got a seven-year sentence and was released in April after serving just three and a half years.
The affidavit has caused a stir because of its detailed description of how Matodzi and other senior management looted VBS Mutual Bank. It also includes details incriminating municipal officials and high-ranking politicians.
Read more: Corruption Central – VBS chairperson Tshifhiwa Matodzi’s canary song, Part One
Matodzi makes no bones about his guilt or that of his co-conspirators. “We engaged in a web of corrupt activities,” he writes right at the beginning. Later, he says the creation of rogue deposit suspense accounts was the main cause of VBS’s collapse.
The deposit suspense account scheme involved the creation of fictitious deposits into suspense accounts, after which money was credited to companies owned by Matodzi, his associates, his family members and certain bank officials.
The “deposits” were then immediately available for use or withdrawal, even though no real cash had been deposited. “Myself and my accomplices utilised the money from the suspense account to acquire big companies. It also enabled us to finance our expensive personal lifestyles at the expense of the real depositors,” he writes.
Former VBS Mutual Bank chairperson Tshifhiwa Matodzi. (Photo: Gallo Images)
Victims just want their money back
Those real depositors are now despondent and point out that jail time for Matodzi won’t get their money back.
A widowed mother of five, Elisa Mudau (65), invested her late husband’s entire estate, including his pension, in VBS. Her story is just one reflecting the thousands of poor and vulnerable people who were diligently saving only to find out that nearly R3-billion was pilfered from VBS’s coffers.
Daily Maverick visited her at Tshilidzini Hospital in Thohoyandou, Limpopo, where she is a patient. Mudau wants to know whether she will ever see the R400,000 she invested in VBS.
Commenting on Matodzi’s sentence, Mudau said: “Whether he gets 15 or 25 years, it makes no difference. He will get out of jail, and we will still have nothing. We just want our money.”
Madambi Muvhulawa, who was one of the founding directors of VBS Mutual Bank. (Photo: Lucas Ledwaba / Mukurukuru Media)
Her sentiments are shared by many victims, including Madambi Muvhulawa (86), VBS’s founder and its former chairperson.
Although Muvhulawa is glad to see the wheels of justice finally turning, he believes the punishment does not fit the crime, saying he expected the sentence to be harsher.
“Sentencing these people to jail time does not bring back the money to the poor people. They are still in the same position that they were [before],” he said.
Muvhulawa said he had trusted Matodzi as a young, educated man who would carry VBS’s legacy into the future. His sorrow is compounded by the recollection that he saw signs of poor management right at the beginning when Matodzi took over the chairmanship. Muvhulawa remained on the board and raised his concerns.
“I warned Matodzi. I told him as the chairman of the board he should not be involved in the day-to-day running of the bank, because that’s the function of the management. He ignored me. Now I realise that he was … doing these things that are being revealed today,” Muvhulawa said.
He claims he wrote to the South African Reserve Bank twice to complain about how VBS was being run, but received no response.
“The Reserve Bank ignored all that. [If it had] acted swiftly, maybe it could have saved VBS,” he said.
Fruit and vegetable hawker Takalani Mavhethwa (62) says the bank had been a saving grace to people in Venda who previously had no access to banking services.
“This bank was the only bank accessible to rural communities. [Our savings were] for our children, so we could make enough money to send them to school. Now it’s all over. They stole from us; they hurt us,” Mavhethwa said.
The boys’ club
In a startling admission that shows that management fully understood what they were doing, a 12-month turnaround strategy for VBS from March 2014 to March 2015 clearly lists under “causes of distress” a lack of “clear accountability from the board and executives” as well as a “cartel and boys’ club mentality at board level”.
The scheme worked until it all got wildly out of control. As more people got to know what was happening, the payoffs increased until there was simply no money left.
“There were simply uncontrolled withdrawals of money by us that never existed in the first place,” Matodzi admits.
On just one day, 5 May 2017, Matodzi authorised three separate transfers for a total of R187-million that went to his personal account (R22-million) and two of his companies, Venmont Holdings (R30-million) and Vele (R135-million).
Family ties
When it comes to his family, Matodzi tries to paint a picture of an innocent family who did not know anything about the fraud. However, the sums of money they received are so large that it seems incredible they would not have asked questions or could have been completely innocent.
He gave his sister, Shonisani Difotso, about R360,000 for her personal expenses and to pay her child’s university fees. Another sister, Aluwani Matodzi, was approved for a home loan and vehicle finance based on a fraudulent income confirmation of R107, 000 a month.
His brother, Takalani Matodzi, was director of Venmont, which received an overdraft of R15.7-million. Their mother, Stephina Matodzi, was a director of three companies: Africasana, the Shimba La Ndou Trust and Masindi Resort. Africasana was granted an overdraft of R4.5-million and the Shimba La Ndou Trust received R14-million from VBS: a R7-million home loan and a R7-million overdraft. Matodzi also used R1.4-million to buy items for his mother’s home.
Matodzi’s personal assistant, Takalani Mmbi, earned a net salary of R150,000 a month and received R139,000 paid back in claims during her employment.
Although Matodzi claims Mmbi was innocent, the forensic report by Advocate Terry Motau says differently. “When VBS was put into curatorship, Mmbi participated in the disposal of assets by Matodzi. She also spirited away documentary records. She was remunerated richly for her efforts,” Motau writes. His forensic report reflects that she received more than R4.4-million.
(Graphic: Jocelyn Adamson)
Politicians receiving ‘bribes’
Matodzi has, in his affidavit, accused former Treasury deputy director-general Dondo Mogajane of asking for and receiving a bribe of R1-million.
In August 2017, National Treasury issued a circular warning municipalities that the Municipal Finance Management Act does not allow them to make deposits at a mutual bank such as VBS. But municipalities were a major source of funding that VBS management was loath to relinquish.
Mogajane says Matodzi wanted to have the circular withdrawn and that he denied this request at several meetings.
Matodzi says he had asked for an 18-month reprieve. This would ostensibly have given him and his cronies time to convert VBS to a commercial bank so that the municipalities could continue channelling money to it.
“During these engagements, we warned Matodzi and VBS to stop taking deposits … During these discussions in 2017 and early 2018, we were not aware that VBS was essentially a scam,” Mogajane said. He has categorically denied asking for or accepting a bribe of R1-million.
However, a R1-million payment was made to the Baphilele Foundation, supposedly after a nod from Mogajane.
In addition, there are numerous other payments or bribes outlined in Matodzi’s affidavit. The then mayor of Thulamela Local Municipality, Mushoni Tshifhango, apparently received a Jeep Cherokee bought by Matodzi.
The ANC
Matodzi says in 2016, Dr Zweli Mkhize, who was then the treasurer-general of the ANC, met with him in Rivonia, Johannesburg. The purpose of the meeting was to ask Mkhize to help VBS to access larger facilities at the Public Investment Corporation. Matodzi says Mkhize asked for R2-million to be paid to an ANC supplier and he had no further engagement with Mkhize.
ANC Limpopo deputy chairperson Florence Radzilani is accused of having R300,000 channelled towards her for investing in VBS during her tenure as Vhembe District Municipality mayor.
Matodzi says she demanded a further payment of R1.5-million for “Christmas money” in December 2017 because the R300,000 was not enough. This amount was later increased to R2-million and was paid into an account owned by Moshate Investments. It was followed by Vhembe money being “rolled over” into VBS.
ANC-linked commission agents: Moshate Investments, Gundo Wealth and TNE Advisory Services were used as “commission agents” to solicit investments from municipalities and other entities.
The sole director of Moshate was Kabelo Matsepe, an ANC heavyweight and former leader of its youth league. He has been criminally charged for his role in the VBS looting and the South African Revenue Service has a R61-million claim against his estate. The Motau forensic report states that Matsepe received R35.4-million in VBS money.
Danny Msiza, who was the ANC’s treasurer-general in Limpopo at the time, also used his influence to solicit investments from municipalities.
The ANC has not yet commented officially on any of the claims in Matodzi’s affidavit.
The SACP
Jacob Mamabolo, then the SACP’s Gauteng chairperson, apparently asked VBS to settle the party’s conference bill of R3-million with the Birchwood Hotel in Kempton Park.
Former Limpopo SACP secretary Phatse Justice Piitso has since slammed the party for having so-called secret meetings with representatives of VBS. He also called for the SACP to pay back any money received from the bank.
SACP national chair Blade Nzimande told Newzroom Afrika that a food company donated the funds, and “the SACP took no money from VBS. The SACP stole no money from VBS”.
Julius Malema, leader of the EFF. (Photo: Gallo Images / Beeld / Deaan Vivier)
The EFF
Matodzi says he met with EFF leader Julius Malema and his deputy Floyd Shivambu at the party’s Sandton penthouse in April or May 2017. “I explained that, as black brothers, the EFF’s constituencies were VBS target market also,” he writes.
He then offered to donate R5-million from VBS to the EFF, followed by R1-million a month once the party opened a VBS bank account. Shivambu later told Matodzi that a VBS account had been opened in the name of Sgameka, a company owned by his brother, Brian Shivambu.
“Myself, Julius and Floyd understood that concept of donation to mean gratification, hence Floyd and Julius did not provide me with the EFF’s own banking details for these donations,” Matodzi writes.
Malema has hotly denied the allegations. News24 reported that, at a media briefing ahead of the opening of Parliament, Malema said: “I’m not scared about this VBS. There’s no affidavit ... it is a sponsored propaganda aimed at intimidating the EFF. No leader of the EFF received VBS money.”
The Dainfern palace
VhaVenda king Toni Mphephu Ramabulana received R4.3-million, if Matodzi is to be believed. But Motau’s report says Ramabulana received just under R17.8-million.
A VBS mortgage bond bought the king a Dainfern property for R7.5-million, and more than R5-million was later spent on renovating the property. Mphephu also received a monthly stipend of R300,000.
Zuma’s Nkandla debt
In March, VBS liquidator Anoosh Rooplal succeeded in obtaining a writ of execution ordering First National Bank to place a hold on any outgoing payments from former president Jacob Zuma’s bank accounts.
The writ says the amount to be realised from the attached account/s is R2.9-million with interest at the rate of 10.25% a year to be calculated from 31 August 2019 to the date of final payment. DM
This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
