Suspects allegedly behind the plundering and collapse of the Venda Building Society (VBS) Mutual Bank have been arrested by the Directorate for Priority Crime Investigation (Hawks).
Four suspects were arrested when the Hawks descended on 10 properties in Gauteng and Limpopo on Wednesday morning. While the further three will hand themselves over to the investigators. The warrant of arrest on the eighth suspect is however yet to be effected, as he is in Covid-19 isolation.
The seven are expected to appear before the Johannesburg High Court, sitting at the Palm Ridge Magistrates Court.
Their arrest is a culmination of a two-year marathon investigation. The VBS bank was placed under curatorship in March 2018 after it experienced liquidity challenges over 18 months. Problems included a failure of the board of directors and executive management to manage the bank’s rapid growth funding and its liquidity.
Advocate Terry Motau, in his investigative report titled ‘The Great Bank Heist’, uncovered massive fraud amounting to R1.9 billion. This amount was looted from the VBS bank.
Addressing the media on the development, National Hawks head, Advocate Godfrey Lebeya, and the National Director of Public Prosecutions (NDPP), Advocate Shamila Batohi, said more arrests are expected to be made, as investigations unfold. Lebeya said the eight face 47 ranging criminal counts.
Uncovering the VBS Looting
The Hawks began investigating the case in 2018. This is after the South African Reserve Bank, through the Chief Executive Officer of the Prudential Authority, reported a criminal case.
“The complainant in this case formed an opinion in his then capacity as the Registrar. The opinion was that VBS Mutual Bank was in financial difficulties and as such, would be unable to repay deposits made with VBS when legally obliged to do so,” said Lebeya.
On 13 November 2018, upon the application of the Prudential Authority, VBS was put under compulsory winding up by the High Court of South Africa, Gauteng Division, Pretoria. Subsequently, a provisional liquidator was appointed on 14 November 2018.