The executive mayor of the Vhembe District Municipality, Cllr Florence Radzilani, said she only became aware of the municipality's investments with VBS Mutual bank in January this year. She spoke about this problem during her State of the District address at the University of Venda stadium last Friday.
"I became aware of the investments with VBS in January after the mayor of Thulamela Municipality made an inquiry to check if we (VDM) were investing with VBS," she said.
Radzilani said the Vhembe District Municipality started doing business and invested with VBS Mutual Bank in March 2014. "It was only after September 2017 that no further investments were made," she said. "From time to time, investments were made and reported to Council through Section 71 and Section 52 of the Municipal Finance Management Act (MFMA)," said Radzilani.
The Vhembe District Municipality is one of the 15 municipalities that had invested money with VBS. Vhembe had invested more than R311-million with VBS, representing almost 35% of its annual operating revenue.
Radzilani, who was recently elected deputy chairperson of the provincial council, also indicated that the investments were not using funds received for capital projects. "The municipality invested surplus funds that were not needed immediately," she said.
She said that the municipality did not undertake any investigation or launch an internal disciplinary process regarding the investment with VBS Mutual Bank "since we didn't know of any regulation infringed that restricted the investment as this was done in the ordinary course of business since 2014," she said.