Court orders liquidation of looted VBS Mutual Bank

VBS Mutual Bank will be liquidated after an application by the Reserve Bank’s Prudential Authority was unopposed at the high court in Pretoria on Tuesday.

A branch of VBS Mutual Bank in Thohoyandou, Limpopo. Bank executives and ANC and EFF politicians have been blamed for the disappearance of nearly R2bn from the bank, causing its collapse.
Image: Antonio Muchave

The bank was placed under curatorship in March after looting by executives led to a liquidity crisis.

A damning Reserve Bank report by advocate Terry Motau and Werksmans Attorneys, released in October, detailed looting at VBS of nearly R2bn and identified the role of political players from the ANC and EFF.

In an affidavit to the high court in October, Prudential Authority CEO Kuben Naidoo said the bank was hopelessly insolvent.

“Despite the efforts of the curator, the vortex of the black hole created by the role-players named in the investigator’s report has resulted in the disappearance of VBS’s substratum and it being objectively impossible for VBS to achieve the purpose of its existence,” he said at the time.

On Tuesday, a draft order was presented to the court that had been agreed to by all parties, and the ruling for the bank’s liquidation was handed down.

President Cyril Ramaphosa and senior ANC MPs have all argued that VBS should be rescued, but parties to the application by the Prudential Authority agreed that it should be wound down.

BusinessLIVE

BY NATASHA MARRIAN – TimesLIVE

Source: TMG Digital

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