The National Treasury has welcomed the recent conviction and sentencing of Mr Tshifhiwa Matodzi, the former chairperson of VBS Mutual Bank. Matodzi, described as the kingpin behind the looting of VBS Mutual Bank, has been sentenced for his role in the collapse of the bank due to corruption, money laundering, and theft.
“The conviction of Mr Matodzi is a testament to the dedicated efforts of our legal and regulatory authorities, including the Prudential Authority at the South African Reserve Bank (SARB) and the Financial Sector Conduct Authority (FSCA),” a spokesperson for the National Treasury said.
“We are proud of the collaboration between National Treasury, SARB officials, the Directorate for Priority Crime Investigation (DPCI), and the National Prosecuting Authority (NPA) that led to this conviction.”
The collapse of VBS Mutual Bank has been a significant focus for the National Treasury. The then Minister of Finance, Nhlanhla Nene, placed VBS under curatorship on March 11, 2018, based on recommendations from the SARB and the Registrar of Banks, Mr Kuben Naidoo.
The Treasury had been taking measures since 2016 to prevent municipalities from making unlawful investments in VBS Mutual Bank. The Office of the Accountant-General (OAG) addressed incidents of municipalities placing deposits in VBS in contravention of the Municipal Finance Management Act (MFMA).
The National Treasury issued communications to municipalities, highlighting the legal prohibitions against such investments. When VBS Mutual Bank attempted to interdict the National Treasury in 2017 to stop the enforcement of these regulations, the Treasury responded with affidavits, reinforcing its position and the illegality of these investments.
Following the curatorship in 2018, the National Treasury met with affected municipalities to discuss their investments, clarify the investment framework, and highlight the consequences of financial misconduct. Municipalities were required to submit detailed information on their investments in VBS Mutual Bank.
Continuous communication was maintained with municipalities to reinforce the legal framework, budget implications, and accounting requirements related to investments in mutual banks.
Recent media reports have surfaced regarding allegations made by Mr Matodzi against Mr Dondo Mogajane, a former Director-General of the National Treasury. “The veracity of these allegations has not been proven nor tested in any court,” a Treasury representative emphasised.
“The concrete steps taken by the National Treasury since 2016 to end unlawful investments should speak for themselves.”
The National Treasury remains committed to holding those responsible for the corruption at VBS Mutual Bank accountable. “Our officials will continue to provide evidence, submit affidavits, and serve as witnesses in ongoing prosecutions,” Treasury said.
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