VBS Mutual Bank CEO
VBS Mutual Bank, formerly known as Venda Building Society was founded in 1982. It adopted the moniker “mutual bank” in 1992, and by 2016, it had 30,000 depositors and R800 million in total deposits.
Prior to its planned 2017 listing on the Johannesburg Stock Exchange, the bank declared bankruptcy. Around R2 billion was stolen from South African citizens and taxpayers, leading to it being declared insolvent and bankrupt in 2018 and being placed under curatorship.
As a result of the bank’s inability to meet its obligations to burial societies and insurance companies, its demise significantly hurt the funeral industry in the Limpopo Province.
Stokvels and saving societies in the Limpopo Province, which belonged to the less fortunate, primarily black South Africans, were also severely impacted. The national government of South Africa decided in October 2018 that it would not support municipalities in that country that had irregularly deposited R1.57 billion with the bank before it went out of business.
It was discovered that the bank had negative equity of R372 million when it closed. Eight individuals connected to VBS and the bank’s auditor KPMG were each charged with 47 counts of theft, fraud, corruption, and contravening the Prevention of Organized Crime Act in June 2020. Three more individuals were taken into custody on November 16, 2021 by the Hawks, South African Police Services, as part of an ongoing fraud investigation.
In regard to KPMG’s audit opinion of the bank, which was already bankrupt at the time, the bank’s liquidators sued KPMG, their auditor, in February 2021 for 863.5 million rand. The largest asset manager in South Africa, Public Investment Corporation (PIC), sued KPMG in July 2021 for the 144 million rand it lost as a result of the fraudulent failure of the VBS Mutual Bank.
The South African Public Investment Corporation acquired its shares in the VBS Bank when it replaced the Venda Bantustan Government Pension Fund, giving it a 25% ownership stake in the organization. The Venda Royal family owned 51% of Dyambeu Investments, the bank’s largest shareholder, and 26% of the company at the time.
VBS Mutual Bank CEO
Chief executive of the bank was Andile Ramavhunga. He appeared to be the State’s first target when it filed a high court petition to seize the executives’ personal assets. The South African government thinks Ramavhunga still has some influence over the bank’s assets because he was once its CEO.