The kingpin and mastermind behind the implosion of VBS Bank appeared cool and calm in court as he testified about how the bank's coffers were looted. His testimony focused on how officials and politicians were allegedly bribed to invest in the bank, among them the former mayor of Thulamela Municipality.
Tshifhiwa Matodzi stepped into the witness box at Polokwane's Specialised Commercial Crime Court last Wednesday, and his testimony lasted almost two days. On trial is the ANC's former Thulamela mayor, Avhashoni Stephen Tshifhango, who is accused of receiving a bribe in the form of a Jeep Grand Cherokee in exchange for allegedly facilitating a R30 million deposit into VBS Bank.
Tshifhango was initially charged alongside the former Thulamela municipal manager, Hlengani Maluleke. In October 2023, Maluleke entered into a plea-and-sentence agreement and received a five-year suspended sentence. He was found guilty only of contravening the Municipal Finance Management Act (MFMA), not corruption.
In July last year, Matodzi pleaded guilty to 33 charges, including theft, fraud, money laundering, and racketeering, related to the looting of more than R2 billion from VBS as part of a plea bargain with the state.
Matodzi was chairperson of VBS and also executive chairman of Vele Investments, a company linked to the bank's operations. He was sentenced to an effective 15-year jail term and is currently testifying under a Section 204 subpoena. This grants him immunity from prosecution if the court finds, at the end of the trial, that his testimony is satisfactory.
Matodzi's testimony began with his explaining how he and a "team of commission agents" targeted municipalities to invest with VBS. He said he had been tasked with devising an investment strategy for Dyambeu Investments. In 2013, Dyambeu, a company in which the Venda royal family was the major shareholder, held around 26% of the shares in VBS Mutual Bank.
Matodzi said he had to develop a strategy to get more institutions to invest their money in the bank. According to him, VBS was crippled by cash flow shortages because most of its funds came from stokvel deposits, which were withdrawn during the festive season, followed by further withdrawals in January as clients paid school fees.
"That was our strategy. We [the commission agents] would lobby municipalities, politicians, mayors – everyone who had influence." Asked what he meant by lobbying, Matodzi replied: "When we talk about lobbying, we meant bribing and giving people things – that was the business."
Testifying specifically about Thulamela Municipality, Matodzi claimed Tshifhango had wanted a vehicle. At that stage, he said, there had already been two unsuccessful attempts to get the municipality to invest.
It was then arranged for Tshifhango to get a Jeep Grand Cherokee, which he selected himself. The vehicle was bought from Ignition Vehicle Rental, with payment facilitated through Foxburgh Capital, a company controlled by Matodzi that was often used to move funds.
According to Matodzi, the R638,400 for the vehicle was paid by Robvet, a slush fund used by VBS officials for lobbying.
Emails shown in court revealed that two Jeep Cherokees, totalling more than R1.2 million, were bought – one for Tshifhango and the other for a Foxburgh employee.
According to Matodzi, after Tshifhango had received the vehicle in November 2016, Thulamela Municipality had made a R30 million investment with VBS on 23 December 2016.
This testimony was confirmed by another state witness, who, under a court order, can only be identified as Mr X. He testified that he had facilitated the sale of both Jeep Cherokees and ensured that one was handed over to Tshifhango.
WhatsApp messages between Mr X and Tshifhango were shown in court, in which Tshifhango provided personal details, including his ID number, to finalise the vehicle's registration. Mr X also testified that Tshifhango had never paid for the vehicle or applied for any vehicle financing.
Messages between Mr X and Matodzi were also presented in court, in which Matodzi instructed Mr X to verify Tshifhango's insurance for the vehicle. Finally, the Jeep was handed over to Tshifhango on 18 November 2016, Mr X testified. "I reported back to him [Matodzi] that everything was now in order and that he could phone Tshifhango – we would get the investment," testified Mr X.
He said that after the handover, there had been several email exchanges between himself and Thulamela Municipality requesting investment quotations. Mr X also visited Tshifhango at his mayoral office to inquire when the investment would be made. "I visited him [Tshifhango] between 17 and 22 December 2016, at several different times, to ask, 'What is going on? When will we get the deposit for the bank?'"
"Matodzi told me not to worry, that [Danny] Msiza would assist by speaking to the accused [Tshifhango] to ensure we got the deposit," Mr X added. He also testified that Matodzi had told him that Msiza had said Tshifhango had known his political future depended on his cooperation.
After this, the municipality deposited R30 million into VBS on 23 December 2016 for a five-month investment at a rate of 9.15%.
Halfway through Mr X's testimony, which began on Friday, Msiza, who was the ANC treasurer in Limpopo, arrived. He did not enter the heavily guarded courtroom but appointed a watch-and-brief attorney to sit in and follow proceedings.
Before Matodzi's plea deal, he was set to be tried alongside Msiza and several other VBS employees in the Pretoria High Court on charges that include racketeering, money laundering, and fraud. The case was delayed after Judge Peter Mabuse ordered that Msiza's trial, along with that of Kabela Matsepe, be separated from their co-accused.
The National Prosecuting Authority is appealing the order, and the matter will be heard again in August.
The case against Tshifhango will resume on 10 and 11 April, when his lawyer, Beauty Madavha, is expected to cross-examine the witness.