Mutual Bank under scrutiny for corruption.
One of the DoDgIest Deals undertaken by the corrupt VBS Mutual Bank was intro-duced by an ANC front com-pany keen on taking a finder’s fee plus 10% in shares, in what was meant to be a R250-million deal.
VBS signed up to buy a 26% share in Insure Group Managers (IGM or Insure, for short) in December 2016 for R250m. IGM is an independent financial services company, providing premium handling services including debit-order collections, deposits and premium disbursements on behalf of insurers and brokers.
The Reserve Bank commissioned an investigation by advocate Terry Motau and Werksmans Attorneys. Their report, “The Great Bank Heist”, which was published in October found that the deal was a sham.
On paper, VBS acquired the Insure stake through its main shareholder company, Vele Investments, which was also controlled by the bank’s chairman Tshifhiwa Matodzi. But how the deal was concluded was anything but legitimate and the signs were all there that something was seriously amiss. The involvement of a secretive “ANC cabal” in the deal had dire real-life consequences: companies were forced to sell assets to cover losses, followed by suspensions, retrenchments and business rescue.
Yet when the Party men involved were contacted by Noseweek, they claimed they had “no idea” that the bank – and their deal – had been riddled with fraud. But one look at the documents in Noseweek’s possession shows that that is most unlikely. All the signs were there that VBS was acting as a rogue bank, but the promise of big commissions and easy money clearly proved irresistible.
This story is from the December 2018 edition of Noseweek.
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This story is from the December 2018 edition of Noseweek.
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