The Directorate for Priority Crime Investigation (Hawks) has pounced on eight suspects allegedly behind the plundering and collapse of the Venda Building Society (VBS) Mutual Bank.
Four suspects were arrested when the Hawks descended on 10 properties in Gauteng and Limpopo on Wednesday morning. While the further three are expected to hand themselves over to the investigators, the warrant of arrest on the eighth suspect is 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.
The arrests are a culmination of a two-year marathon investigation. The 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, which was looted from the 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.
“These are five counts of Patterns of Racketeering Activities, in contravention of the Prevention of Organised Crime Act 121 of 1998, POCA; 12 counts of theft; seven counts of fraud; 15 counts of corruption, in contravention of the Prevention and Combatting of Corrupt Activities Act 12 of 2004, and seven counts of money laundering [POCA],” he said.
The Hawks began investigating the case in 2018 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, 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. A provisional liquidator was appointed on 14 November 2018.
Lebeya said an investigation revealed that as at 11 March 2018, there was a general deficiency in the monies received by VBS amounting to R2.2 billion.