The ghost of the ill-fated VBS Mutual Bank is still haunting the Makhado Local Municipality (MLM) – but this time, ironically, not for what was lost but for what was found. Councillors have called for a thorough investigation after municipal officials allegedly failed to declare nearly R12 million paid into the municipality's account by the bank's liquidator.
In December last year, Mr Anoosh Rooplal, the bank's liquidator, announced that another payout would be made to verified creditors, including municipalities that had invested in the now-defunct bank. MLM was to receive R11,668,601.
The municipality had unlawfully invested R155 million in VBS Bank, but when the bank was liquidated, the outstanding balance stood at R62.73 million. In February 2022, the liquidators paid over R4,391,409 to MLM as part of the first payout to creditors. According to the 2023/24 annual financial statements, MLM was still owed R58,264,578.
Even though the VBS liquidator made a public announcement concerning the payouts, MLM councillors argue that they were not informed. Some claim they only became aware of this during a council meeting on 29 May this year, when the matter was raised from the floor, and not through official channels.
When questioned, Mayor Dorcus Mboyi allegedly claimed she did not know anything about VBS-related funds. Reports suggest that the municipality's finance portfolio committee was never informed, nor were the payments captured in any monthly reports, adjustment budgets, or formally declared under the Municipal Finance Management Act (MFMA).
To date, no clear explanation has been provided as to where the funds were allocated, whether the money was spent or remains in reserve, or whether any conditions were tied to the VBS dividends.
Earlier this year, during an interview with the SABC, Limpopo Co-operative Governance MEC Basikopo Makamu warned municipalities to use the recovered funds for essential service delivery.
Council has now resolved that a comprehensive report must be tabled at the next sitting, which was scheduled for 24 July. The report must disclose full details of the funds and their use, the account into which they were deposited, justification for the failure to report, and steps to prevent future governance failures.
There are also calls for the National Treasury and Limpopo's MEC for COGHSTA to launch an urgent investigation.
Despite repeated attempts to reach them, Mayor Mboyi, Municipal Manager Kent Nemaname, and Municipal Communications Manager Mpho Rathando were unavailable for comment.