Even though the liquidator of VBS Mutual Bank has already recovered R617 million of the looted funds, many individuals who invested their savings in the bank remain frustrated. While the payments to municipalities have been welcomed, individual investors who lost their life savings feel that the compensation is minimal.
Mr Anoosh Rooplal, the bank's liquidator, announced last week that the recovered funds will be paid back to verified creditors, including municipalities that had invested in the now-defunct bank, trade creditors, and 458 retail depositors who had more than R100,000 in their VBS bank accounts.
In an interview with the SABC, Limpopo Co-operative Governance MEC Basikopo Makamu warned municipalities to use the recovered funds for essential service delivery.
"Municipalities like Vhembe received about R80 million; Fetakgomo Tubatse got about R58 million; Greater Giyani received about R10 million; and Lepelle Nkumpi got about R39 million. This helps municipalities recover the income they lost. I believe the money should be channelled or redirected towards service delivery, including resolving water projects," he said.
The recovered funds account for 25.6% of the total amount lost. In the Vhembe District, the Vhembe District Municipality was the biggest loser, having invested more than R350 million when the bank collapsed. Makhado Municipality lost around R50 million and will get back R12.8 million, while the Collins Chabane Municipality, which had invested just over R123 million, will recover almost R32 million.
However, not everyone is "smiling all the way to the bank." The VBS Mutual Bank Shareholders' Forum claims that only a small portion of the R617 million paid out by the liquidator has reached depositors. The forum's secretary, Mr Robert Livhoyi, said the payments have been disappointingly low.
"The first payment was R7 per R100, and the second was R20 per R100. Even though members were unhappy, there was nothing they could do. Approximately 400 shareholders in Vhembe were affected," he said.
Livhoyi added that members were dissatisfied with the liquidator's payout criteria, particularly those who had invested their entire pension savings in the bank. "It has been a painful experience for them. Some have lost hope, and a few have passed on," he said.
The spokesperson for the liquidator, Ms Louise Brugman, told this newspaper on Monday that funds are distributed according to valid claims submitted to the liquidator. She explained that each creditor receives a different amount depending on their claim, but all will receive 25.6% of their claim (including both dividends).
"Once the second payment has been made, creditors will have received R617 million, along with the already paid first dividend. Ninety-eight percent of retail creditors who held less than R100,000 in their VBS accounts have been paid in full (up to R100,000) through the Department of Treasury, which provided a guarantee to the SARB," she said.
According to Brugman, the 458 retail depositors who held more than R100,000 in their accounts are now classified as creditors. They will receive 25.6% of their funds from the first and second dividends, provided they have submitted valid claims to the liquidator.