Government to launch lawsuit in bid to recover VBS money

VBS Mutual Bank
VBS Mutual Bank

The government said on Tuesday it would seek to recover millions of dollars stolen from VBS Mutual bank.

A central bank report, titled “The Great Bank Heist“, into the failure of VBS Mutual bank revealed that R 1.89 billion was stolen over three years by 53 individuals, including executives and politicians.

Local Governance Minister Zweli Mkhize told parliamentarians that he had instructed lawyers to “launch a lawsuit on this matter so that we must chase and try and recover the money“.

The minister described the situation at VBS Mutual as a “very crude abuse of finances which were destined for poor communities“.

He said the bank had adopted “a systematic structured fraudulent process that was siphoning money out” to a few individuals, in a “case of the greedy robbing the poor“.

“We cannot allow this money to disappear; it’s our people’s money, poor people’s money,” he said, vowing that “justice must prevail“.

The investigation into the bank was launched after VBS suffered a severe liquidity crisis and it collapsed into administration.

The bank’s failure has hit poor and rural clients hardest.

“It’s grossly unfair. It’s not possible for two billion rand to just disappear,” Mkhize said.

“All the money must be recovered.”

The probe also revealed malpractice including the granting of overdrafts to well-connected clients and bribes paid to individuals in exchange for deposits from state-owned companies and municipalities.

Parliament last week said it would investigate the EFF’s Floyd Shivambu over claims his brother profited from the fraud.

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