Zuma and Ramaphosa dragged into VBS saga

As the VBS Mutual Bank saga continued to simmer in the weekend media, with claims and counter claims from those implicated in ‘The Great Bank Heist’ dominating the news pages, it has come to light that the NPA is investigating the circumstances around the servicing of former President Jacob Zuma’s R7.8m loan from the bank to pay for his Nkandla homestead, notes Legalbrief. The question that has arisen is: Had the bank not been placed in curatorship would the loans have been repaid at all? It was also claimed that President Cyril Ramaphosa was informed of the looting spree that led to the dramatic collapse of the bank and the loss of almost R2bn deposited by some of Limpopo's poorest municipalities early last year, but did nothing about it. The claim has been denied by the Presidency but the DA says it is considering legal action against Ramaphosa over what it says are 'serious allegations' that need to be answered by the President himself. Party leader Mmusi Maimane also said he would submit an urgent question to the President in Parliament on Thursday regarding ‘the veracity of these allegations’. ‘Our lawyers are also considering charges against the President in accordance with the Prevention of Organised Crime Act, Maimane is quoted as saying in a report on the IoL site. While Ramaphosa’s spokesperson Khusela Diko had denied the claims, the President would be wise to use his final oral questions session for the year next week 'to play open cards with the people of SA', he said. And in another twist in the ongoing saga, the EFF has been urged to conduct an internal investigation into what its deputy leader, Floyd Shivambu, knew about his brother's alleged involvement.

A shareholder personally informed Ramaphosa about what was going on, according to City Press quoting sources close to a major VBS shareholder. ‘I know that the shareholder met with Ramaphosa, who was not President at the time. The shareholder briefed him about the outrageous corruption at VBS,’ a source reportedly told the newspaper. Another is quoted as saying: ‘During the meeting, Cyril had apparently raised serious concerns about VBS. He promised to do something about it, but he didn’t do anything.’ The shareholder began blowing the whistle from 2016 about what was going on at the bank. However, Ramaphosa was not the first person the shareholder went to for help. City Press says it has learnt that in June 2016 – more than six months before he met with the then Deputy President last year – the shareholder reported what he knew to the SA Reserve Bank and the then Financial Services Board (now the Financial Sector Conduct Authority, or FSCA). Then, in about June last year, after meeting Ramaphosa, the shareholder appealed to a ‘former politician at Treasury, who facilitated a meeting between the Public Investment Corporation (PIC) and the whistle-blowing shareholders’. ‘No action resulted from the PIC and the shareholder,’ said another source.

Zuma started repaying the loan to pay for his Nkandla homestead only after the bank was put under curatorship in March – 18 months after the loan was granted, says a Sunday Times report. It says a special team comprising Hawks investigators and senior NPA prosecutors has been tasked with looking into who serviced Zuma's loan since September 2016, when it was granted. It will look at whether former executives of VBS created fictitious deposit entries against Zuma's account to make it seem as if it was being serviced monthly. The team will also be examining suspected money-laundering, corruption and fraud at the bank. The Sunday Times says it has established Zuma signed his loan agreement only nine months after the money was granted by the doomed bank. The unusual agreement is one of the questions Zuma and others will have to respond to when the Hawks seek answers about how the loan was granted, whether it was done in accordance with the law and who serviced the loan prior to Zuma, and for what reason. The newspaper says it has established from those close to the VBS investigation that Zuma started making repayments, of about R70 000 a month and debited to his Absa account, only from March, when the bank went into curatorship. ‘The payment profile changed in March (2018) to reflect Zuma as the person depositing the money. What we are unable to see is who was making payments before then,’ it quotes a ‘source close to the investigation’ as saying. UDM leader Bantu Holomisa reportedly called for further investigation into the relationship between Zuma and VBS' top management. ‘If he started to pay the loan in March, then it is clear he was not going to pay (had the bank not been placed under curatorship),’ said Holomisa.

Former Public Protector Thuli Madonsela has urged the EFF to conduct its own internal forensic investigation to determine whether its deputy president, Floyd Shivambu, was aware of his brother’s alleged involvement in the matter, notes Business Day. The Reserve Bank report found Brian Shivambu received R16m in ‘gratuitous payments’ from VBS. He says his company, Sgameka Projects, was appointed in 2017 to ‘provide professional consulting services to Vele Investments and was paid through a VBS account'. Vele Investments is the majority shareholder of VBS Mutual Bank. Madonsela says the amount paid to Brian Shivambu’s company was ‘huge’ and should potentially have raised ‘red flags’ with his brother. '...I think the EFF would have to have its own internal forensic investigation, to look at the extent to which Shivambu knew, or should have known, that his brother’s company could not have been competent enough to have amassed that amount… They would then have to question him around whether there could have been red flags around the fact that your brother has just started this company and he now has this surplus,’ she is quoted as saying by Business Day. The EFF insists that anyone guilty of wrongdoing in the VBS scandal must face the full might of the law. But Madonsela says the party cannot – like the ANC under Zuma – ignore its own obligations to properly investigate alleged ethical breaches by its leadership. ‘They’re finding themselves in the same spot as the ANC and it seems to me that they’re resorting to the same tactics,’ said Madonsela. ‘I think they will have to decide whether they want to continue to present themselves as a paragon of ethics … and they’re then the same as the ANC was then, saying: forget about ethics, all we care about is the criminal justice system and we know it takes forever, therefore our people can remain on board.’

Floyd Shivambu continues to deny he benefited from the heist. ‘Ever since the VBS heist report was released‚ I see weapons of mass deception and propaganda machines hard at work to mislead our people with their fake news,’ he is quoted as saying by TimesLIVE. ‘For the record‚ I have never received R10m from VBS or anyone in my personal account. Faceless sources reportedly to be from SA Reserve Bank‚ who have ulterior motives‚ have been misleading journalists and radio presenters with their malicious narrative‚’ Shivambu’s statement said. He added: ‘I have no dealings with VBS and any attempt to link the EFF to the bank for cheap political points is a clear sign of desperation and soon enough people will see through it. The so-called well-placed sources in the SARB is a coward and a liar (sic) who misled journalists and can’t even reveal their identity. ‘ I have no dealings with VBS and attempts to link the EFF position to business dealings are disingenuous and patently weak.’ Shivambu’s brother‚ Brian‚ has also denied receiving any money from VBS. However, according to a speculative Sunday Tribune report, Floyd Shivambu could be in trouble with Parliament’s Ethics Committee despite his denials. Co-chairperson of the committee, Omie Singh, said anyone could lodge a complaint against the EFF deputy leader and the committee would investigate the matter. Singh said so far no one had laid a complaint.

Floyd Shivambu hasn't declared anything in Parliament's Register of Members' Interests since he became an MP in 2014, notes a News24 report. And on Friday, the Mail & Guardian reported that it had seen screenshots of text messages believed to be between Floyd Shivambu and controversial Public Investment Corporation (PIC) beneficiary Lawrence Mulaudzi, who is being investigated for a R300 000 request for payment to an alleged lover of PIC boss Dan Matjila. In the messages, Floyd reportedly provides Brian's business account details to Mulaudzi. The same account number provided by Floyd, registered in the name of Grand Azania, has been linked to the suspicious VBS Mutual Bank payments. News24 says it looked through Parliament's Register of Members' Interests for every year since 2014 – when Floyd Shivambu entered Parliament for the first time. Nothing to disclose,’ reads every entry under Shivambu's name. The register requires MPs to disclose the following: shares and other financial interests; remunerated employment outside Parliament; directorships and partnerships; consultancies or retainerships; sponsorships; gifts and hospitality; benefits; travel; land and property; pensions; contracts; and trusts. The Code of Conduct for MPs requires them to disclose ‘the source and description of direct financial sponsorship or assistance from non-party sources and the value of the sponsorship or assistance’.

Meanwhile, the Reserve Bank report's author, Advocate Terry Motau, isn't bothered at the growing list of people wanting to sue him because he believes they haven't read his report. ‘I'm not concerned because I have no doubt that they have not read the report. The report does not say anyone is guilty. The question is: Is there money missing from the bank? Yes. Was there money paid out? Yes. Was it paid to entities and people? Yes. Who are they? And how much was paid out?’ Motau is quoted as saying in a Saturday Star report. On Friday, former KPMG chartered accountant Sipho Malaba announced that he was considering taking legal action against Motau, who found that he had received about R34m in gratuitous payments. Malaba's lawyer, Shevira Devachander, said a decision on which course of action to take would be finalised this week. According to Devachander, this could see an application to have the report reviewed, nullified and set aside. She said the legal team was still going through the report, adding that evidence presented by Motau’s findings did not reflect what Malaba submitted at an earlier inquiry.

Ramaphosa wants developments around the scandal to be dealt with swiftly, adding that all the individuals implicated should face the music. SA was being looked at by international investors which is why it was important that issues such as corruption were dealt with speedily, Ramaphosa said, according to a News24 report. He said the VBS saga was just as concerning as the Steinhoff scandal that broke out last year. ‘We need to speed up the process of ensuring that those who have done wrong against our people should be made to account without delay,’ he said. And a TimesLIVE report says the ANC has referred members implicated in the saga to its integrity commission. ANC deputy secretary general Jesse Duarte said the integrity commission would meet this week to consider the report on the collapse of VBS and ‘the cases of leaders and members implicated and/or accused of wrongdoing in the report’. ‘The officials of the ANC will also meet with the officials of Limpopo‚ to discuss the response of the province to the serious allegations raised in the report‚’ she added.