VBS Mutual Bank Bonds
VBS Mutual Bank Bonds, Scandal-ridden VBS Mutual Bank gifted former president Jacob Zuma an R8.5m bond which he could not afford, and at least nine months before any documents were signed to give the bank security over the loan.
Basic calculations show that Zuma could not have afforded the bond on his R2.87m a year salary alone.
Zuma used the VBS bond in September 2016 to pay back a portion of public funds used for “security upgrades” to his Nkandla homestead after he was ordered to do so by the Constitutional Court.
The mortgage facility given to Zuma has been described as a “sham transaction” in court papers before the Supreme Court of Appeal. The papers highlighted that Zuma only signed documents giving VBS security over the bond some nine months after the money was paid.
This is revealed in an SCA bid by Venda princess Masindi Mphephu filed last year, in which she is seeking to overturn a Limpopo High Court ruling setting aside her bid to be recognised as the rightful heir to the Venda throne.
Her uncle, Toni Mphephu-Ramabulana, was recognised by Zuma and traditional authorities as the Venda king following the death of Masindi’s father, Tshimangadzo Mphephu.
‘Unusually favourable terms’
Masindi filed an application seeking to introduce new evidence in her SCA bid, being the Zuma bond agreement, which she says illustrates that VBS gave Zuma the bond on “unusually favourable terms” allegedly in exchange for Zuma recognising Mphephu-Ramabulana as monarch.
Mphephu-Ramabulana was this week cited in the explosive final investigation report into the collapse of VBS Bank by Advocate Terry Motau, titled The Great Bank Heist.
VBS was placed under curatorship in March and Motau mandated to investigate soon thereafter. He found wide-scale fraud that led to R1.8bn being siphoned out of the bank.
The Venda king was among more than 50 beneficiaries of this fraud scheme. Motau found he had received roughly R17m.
The details of the court bid were first published by the Sunday Times in February this year.
She obtained an interdict in September 2016 to stop the coronation of her uncle from going ahead – just days after Zuma paid back the funds for Nkandla.
The VBS report did not mention the Zuma bond.
Detailed questions sent to Zuma via his spokesperson Vukile Mathabela went unanswered.
‘I paid back the money’
On September 12, 2016, the Presidency issued a statement confirming that Zuma had paid an amount of R7.8m to the South African Reserve Bank.
Crucially, the statement reads: “The President raised the amount through a home loan obtained from VBS Mutual Bank on its standard terms.”
Annexures to Masindi’s court papers show that the bond was, however, anything but standard.
Accepting that the funds were made available to Zuma in September 2016:
• Zuma only signed a power of attorney authorising a Pietermaritzburg conveyancing attorney to appear on his behalf before the registrar of deeds on March 28, 2017, six months after he got the money from VBS and repaid the funds.
• The mortgage covering bond note is signed and stamped by the registrar of deeds on June 1, 2017, nine months after the funds were made available to Zuma.
A title deed search on Zuma’s name shows the value of the VBS bond as only R7.1m, despite him receiving a total mortgage facility of R8.5m.