How VBS Mutual Bank was looted of R1.5 billion by a king and executives

How VBS Mutual Bank was looted of R1.5 billion by a king and executives

- VBS Mutual Bank is in the news after billions of depositors' money disappeared

- Millions of rands was allegedly used to fund the lavish lifestyles of king Ramabulana and other executives

- VBS Mutual bank has been put under curatorship by South Africa's Reserve Bank

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According to reports by the City Press, a large part of this money went to funding the luxurious lifestyles of Vhavenda King Toni Mphephu Ramabulana and other executives.

The R1.5 billion was municipal money invested in the bank - now it's gone.

Some of the expenses covered for by VBS bank include expensive shopping sprees, private helicopters, loans, and many luxury cars.

The Reserve Bank has placed VBS Mutual Bank under curatorship earlier this year, according to reports by BusinessTech.

Statements show that king Ramabulana, Robert Madzonga (former Vele chief executive), and Tshifhiwa Matodzi, VBS Mutual Bank's former chairperson, all used millions from the bank to live the high life.

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This money belonged to the depositors.

Unpaid overdrafts, mortgage bonds and loans to Vele Investments and associates led to further depletion of the bank's funds.

Vele Investments is VBS Mutual Bank's main shareholder and has a 53% stake in the bank.

But according to the damning reports, Vele Investments used VBS Mutual Bank to finance its other ventures.

Briefly.co.za learned that king Ramabulana was given a salary of R310 000 a month from Vele. This money was deposited into the king's VBS Mutual Bank account.

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It is further shown that the bank paid for the king's cars - worth more than R6 million.

The king allegedly also spent more than R30 000 on designers clothes at La Martina, a boutique sports and leisure clothing store in Nelson Mandela Square and the very exclusive Giorgio Armani store in Sandton.

The bank paid R9 million to the Dzata Trust - registered under Paul Makhavhu, the king's legal adviser. The trust's overdraft was a nice R6 million.

Madzonga was happy to receive a salary of R400 000 a month (after-tax) as well as R100 000 in travel allowances.

Reportedly Madzonga also received an amount of R15 million from VBS Mutual Bank. He used this money to pay for his cars - worth more than R6 million.

According to bank statements, loans and transfers are responsible for the disappearance of a lot of the depositors' money.

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VBS Mutual Bank transferred R175 million into the account of Bophelo Benefit Services between August and December.

R120 million was paid into the account of Bophelo Life Insurance during August and December.

Unserviced overdrafts to numerous account holders such as Vele Investments, Wegezi Power Holdings and MBR Finance account for more than R30 million of the missing money.

Small companies who showed no income also ran their operations through the bank.

Ndivhuwo Khangale, the spokesperson for Vele, did not want to comment on the matters of the bank.

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There are 14 municipalities who lost the money they invested in VBS Mutual Bank.

One case shows how a deposit of R50 million was made from a municipality to the bank.

Thys Wienekus from Merafong City Local Municipality was instructed by Romeo Mohaudi, the chief financial officer at West Rand District Municipality to deposit the money on the 23rd of June 2017.

Mohaudi and Wienekus did not want to comment on the allegations.

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Source: Briefly.co.za

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