Was VBS turned into a Ponzi scheme?
10 July 2018 CURRENT AFFAIRS
Acting CEO of SA Savings Institute Gerald Mwandiambira says VBS Mutual bank entered a point of no return and unfortunately may not be saved.
Speaking to David O’Sullivan Mwandiambira said, VBS as a Mutual Bank was doing well and mutual owners were getting good returns. The Bank then attracted huge deposits and an element of greed showed itself and turned the bank into a Ponzi scheme.
VBS Mutual Bank Curator Anoosh Rooplal has applied to the High Court for an urgent interdict to recoup money siphoned from the institution through fraudulent activity.
Rooplal says fraud, breach of corporate governance and mismanagement amounted to the bank losing R1.5 billion. The curator wants the assets of Vele Investment, VBS chairman Tshifhiwa Matodzi and CEO Andile Ramavhunga among others attached.
Yesterday Reserve Bank Governor Lesetja Kganyago said municipalities and larger businesses would not be able to receive any of their funds from VBS bank. The bank was placed under curatorship as a result of its increasing liquidity challenges in the last 18 months.
VBS Mutual made headlines in 2016 after it lent then President Jacob Zuma money to reimburse the government for personal upgrades to his home in Nkandla.