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Heads must roll of municipal officials behind illegal VBS Bank investments - Maile

VBS Mutual Bank
VBS Mutual Bank

Gauteng MEC for cooperative governance Lebogang Maile has written letters to the mayors of the West Rand district and Merafong local municipalities demanding action against officials behind the illegal investments into the failed VBS bank.

The West Rand district municipality had invested R612m and Merafong City R50m in the bank which was, according to a report by lawyer Terry Motau and Werskmans Attorneys, looted by politically connected individuals of almost R2bn in over three years.

In a media statement issued on Thursday, Maile demanded that the two mayors should "fully implement the recommendations emanating out of forensic investigations".

The reports of two forensic investigations by audit firm Deloitte SA, which were commissioned by the Gauteng government, recommended that appropriate disciplinary action and criminal proceedings be instituted against the affected officials. 

The reports also recommended that steps be taken to ensure the recovery of the public funds that were unlawfully invested.

Maile raised concerns that both municipalities have not "in a principled manner acted on the recommendations".

Maile stated that action taken against implicated officials will go a long way in restoring  public confidence and slowly repair the already tarnished image of the public service. 

"It [action] will also send a very strong message to society that government is waging a relentless fight against any form of impropriety," the statement said.

Maile, who studied both the reports, has now demanded "stern action" to be taken  against all implicated officials "without any fear or favour". 

Maile has instructed both mayors to provide him with a comprehensive response within seven days of receipt of his directives as contained in the letters, on the implementation of the recommendations of the forensic reports.

Maile warned that "heads must roll" in the interest of selfishly safeguarding public funds if the two municipalities failed to act, the statement added.

The investments into VBS by the municipalities were done outside mandatory directives of Treasury which don't allow municipalities to invest funds in mutual banks.