The Guardian
Email YouTube Facebook Instagram Twitter WhatsApp

South Africa president denies ignoring fraud at failed bank


South African President Cyril Ramaphosa addresses people during a hand over of 4,586 hectares of land to the community of KwaMkwanazi in Empangeni, some 145 kilometres north of Durban, on October 14, 2018 during a ceremony to mark the successful transfer of land and ownership to the community following a land claim. – The KwaMkwanazi community was forcibly removed from their land following the enactment of the 1913 Land Act. From 1915 to 1918 the first group of dispossession took place to the KwaMkhwanazi people, their dispossession was a result of returning World War I white soldiers. In the 1940s, the white farming community expanded their commercial interests in timber and cane. As part of government’s programme of land reform and restitution, the successful 1,656 claimants regain ownership of their ancestral land. The KwaMkwanazi community receive the title deeds as well as post-settlement packages and support that will assist the community in leveraging the potential wealth of the land. (Photo by Rajesh JANTILAL / AFP)

South Africa’s President Cyril Ramaphosa on Monday denied accusations that he ignored widespread looting and financial misconduct at a major retail bank that collapsed weeks after he came into office.

VBS Mutual gained notoriety in 2016 when it lent scandal-tainted former president Jacob Zuma $540,000 (466,000 euros) to repay taxpayers for upgrades he made to his private home.

Ramaphosa dismissed local media claims that he was forewarned about massive fraud at VBS months before it collapsed earlier this year while he was still deputy president and that he failed to act.

“The presidency categorically rejects reports that President Cyril Ramaphosa failed to take action on the VBS Bank saga despite being alerted to irregularities back in 2017,” said a statement from his office.

“The allegation is baseless and unsubstantiated.”

His office added that “the claim that President Ramaphosa was forewarned about the impending implosion of VBS Bank is unsubstantiated.”

The bank collapsed in March, a month after Ramaphosa took over from Jacob Zuma, who was forced to resign in February.

A probe commissioned by the country’s central bank showed that the bank failed after 1.9 billion rands ($130 million) was looted over three years.

The investigation’s damning report, titled “The Great Bank Heist”, described the bank as “corrupt and rotten to the core”.

It implicated 53 individuals including senior members of the ruling African National Congress.

The probe also revealed malpractice including the supply of overdrafts to well-connected clients and payments made to individuals in exchange for deposits from state-owned companies.

The investigation was launched after VBS suffered a liquidity crisis and was put into administration earlier this year.

By 2017 the bank had 30,000 clients and deposits worth $55 million, according to local media.

Some analysts suggested that Ramaphosa turned a blind eye because he feared to jeopardise his chances of winning the ANC’s party leadership and his subsequent ascent to the presidency.

Receive News Alerts on Whatsapp: +2348136370421

No comments yet