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Collapsed VBS Mutual Bank

Parliament pleads with other banks to prioritise laid-off VBS staff

Standing Committee on Finance has expressed outrage following collapse of VBS Mutual Bank which resulted in “innocent” employees losing their jobs.

In a statement on Wednesday, Committee chairman Yunus Carrim called on the Hawks and the National Prosecuting Authority (NPA) to act swiftly and decisively against those implicated.

“Without interfering with the internal investigations of the Hawks and NPA,  consistent with our oversight role, we will call on the Hawks and National Prosecuting Authority to report on progress,” said Carrim,

Committee’s comment follows the release of Advocate Terry Motau’s report on VBS Mutual Bank commissioned by the South African Reserve Bank’s Prudential Authority.

The report into the collapse of the bank, released last week, mentioned that Economic Freedom Fighters Deputy President, Floyd Shivambu’s younger brother, Brian had received R16M payment in gratuitous payment from VBS as part of nearly R2 billion looting of the bank.

Democratic Alliance Team One South Africa Spokesperson on Corruption, Phumzile Van Damme said  her party has on Wednesday received confirmation that Parliament’s Joint Committee on Ethics and Members’ Interest will investigate Floyd Shivambu’s  “possible” conflict of interest regarding payments received from Brian

“The Committee said is outraged at the plunder of VBS Mutual Bank and urged the Hawks and the National Prosecuting Authority (NPA) to act swiftly and decisively against those implicated in wrongdoing,” said Carrim.

Carrim said the Committee will only consider the VBS Report on November 7, 2018.

Carrim said the meeting will include the SARB, Advocate Motau, the National Treasury, the Financial Sector Conduct Authority, the Hawks, the NPA, and the Independent Regulatory Board for Auditors (IRBA) and the South African Institute of Chartered Accountants.

“We urge the Independent Regulatory Board for Auditors to complete its investigation into the conduct;

We also urge the South African Institute of Chartered Accountants to not be lame and act,” said Carrim.

He described the collapse of VBS as a major setback for diversity and transformation in the financial sector, saying until the someone convince the Committee otherwise, its view remains they should make every attempt to rescue VBS under a new effective leadership.

The committee has also expressed a concern that innocent employees at VBS Mutual, not accused of being part of the plunder, have lost their jobs and requested other banks to priorities them in filling in vacancies.

“We need to learn the lessons from the collapse of VBS Mutual Bank to reduce the prospects of this happening in other financial institutions in the future.

There is a need for an inquiry to probe whether SARB, National Treasury, the Department of Cooperative Governance and Traditional Affairs, the South African Local Government Association and other relevant organs of state could have acted sooner on VBS and reduced the results of its failures,” said Carrim.

With implementing the Financial Sector Regulation Act from April 1 this year, said Carrim, the new Prudential Authority has greater powers to subpoena witnesses and access information to investigate allegations of wrongdoing by financial institutions.

Carrim said the Committee believes these greater powers will serve the interests of depositors and policy holders, especially the lower income depositors and policy holders who lose out the most when financial institutions collapse.

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