Former PIC officials told to pay back “VBS loot”

Slowly but surely the long arm of the law seems to be reaching the people who took part in the looting of the now-defunct VBS Mutual Bank. The two officials delegated by the Public Investment Corporation (PIC) to serve on the VBS board were instructed by the High Court on Monday to repay R11,2 million and R12,2 million respectively to their former “blesser”, Vele Investments.

Ernest Nesane and Paul Magula, the two former PIC officials, were appointed to safeguard the R350 million investment of their employer while they served on the VBS board. Instead, they seemingly looked the other way, allowing the bank to effectively be run as a ponzi scheme. Between November 2015 and March 2018, Nesane pocketed R16,64 million and Magula R12,89 million in illegal cash payments, loans, and benefits.

One of the VBS-affiliated companies, Vele Investments, served as conduit to channel money to Nesane and Magula. When Vele Investments was liquidated, the joint liquidators set about recovering the money. On Monday, the case served in the High Court in Pretoria and both Nesane and Magula took a hiding.

Nesane and companies he is involved in (such as Azimbo Lodge CC), were instructed to pay R5,6 million to the liquidators. On top of that, the court imposed a further penalty in terms of the Insolvency Act of R5,6 million. Interest of 7% per annum will be applicable, calculated from the day of judgment.

Magula received a similar punishment. Apart from the R6,1 million that he needs to repay to Vele’s liquidators, he was also slapped with a R6,1 million fine and 7% interest. The two companies that are linked to him are Hekima Capital Pty Ltd and Investar Connect Holdings Pty Ltd.

At the time of our going to press, no certainty existed on what steps are currently being taken to recover money from the dozens of other people implicated in the Motau report. This report was compiled by advocate Terry Motau and the law firm Werksmans, per instruction of the SA Reserve Bank, after the problems at VBS started surfacing. Some of the names include that of the caretaker king of the Vhavenda, Khosikhulu Toni Mphephu Ramabulana and his legal advisor, Paul Makhavhu.

Thus far, nine people have been arrested in connection with irregularities at VBS Mutual Bank. The bank’s former CFO, Philip Truter, pleaded guilty to the charges against him last year and was sentenced to seven years’ imprisonment. Truter had admitted to receiving R5 million in stolen loot.

Seven of the people implicated in the VBS fraud are scheduled to appear in the Palm Ridge Magistrate’s Court next Tuesday (26^th).

Date:21 January 2021

By: Anton van Zyl

Anton van Zyl has been with the Zoutpansberger and Limpopo Mirror since 1990. He graduated from the Rand Afrikaans University (now University of Johannesburg) and obtained a BA Communications degree. He is a founder member of the Association of Independent Publishers.

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