Limpopo officials to pay back the money

VBS Mutual Bank in Thohoyandou, Limpopo. Treasury says millions have disappeared from the bank.
VBS Mutual Bank in Thohoyandou, Limpopo. Treasury says millions have disappeared from the bank.

Senior Limpopo municipal officials who were behind the investment of public funds in the Venda Building Society (VBS) will have to pay back the money.

According to the National Treasury, up to R900-million from VBS disappeared due to fictitious deposits or untraced lending.

The Limpopo governmentyesterday directed the provincial treasury to immediately commence with a forensic audit to determine whether the eight municipalities flouted any legal provisions when they invested funds with VBS.

Government spokesman Phuti Seloba said: "When the treasury has completed with the forensic investigations, those implicated will have to pay back the money.

"We are going to refer the report to law enforcement agencies who will do everything in their power to recoup almost a billion rand."

The eight municipalities, namely Ephraim Mogale, Lepelle-Nkumpi, Fetakgomo- Greater Tubatse, Elias Motsoaledi, Makhado, Vhembe, Greater Giyani and Collins Chabane, still have funds invested with the bank.

The department of cooperative governance has written letters to all the municipalities that invested funds with VBS with a view of establishing the total amount invested, date of investment and duration.

The department wants proof of a resolution or approval authorising the investments.

It further wants to know the impact of the non-availability of the invested funds on the financial viability of the municipalities and measures in place to mitigate the impact.

Giyani municipality spokesman Steven Mavunda said he was not aware of the government's decision to launch a formal investigation but welcomed it. "Though we invested R150-million with the bank, at the moment we are not faced with service delivery challenges. Our municipality is operational," he said.

Sowetan understands that two senior officials from the municipality were suspended last month for allegedly investing money without council approval.

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