49-425: VBS Mutual Bank was a South African mutual bank . In 2018 it was declared insolvent and bankrupt and placed under curatorship, with South African citizens and taxpayers defrauded out of roughly R 2 billion. It was formed as Venda Building Society in 1982, and became a mutual bank in 1992. By 2016 the bank reportedly had around 30,000 depositors with all deposits in the bank totalling R800 million. In 2017
98-567: A community-oriented approach. Regulations around mutual banking vary by country. This finance-related article is a stub . You can help Misplaced Pages by expanding it . Nkandla homestead The private residence of former South African President Jacob Zuma is situated about 24 km (15 mi) south of the rural town of Nkandla in KwaZulu-Natal and is commonly referred to as the Nkandla homestead . During Zuma's presidency ,
147-411: A former EFF senior member of his party for alleging that Malema had admitted to him that he benefitted from corruption at VBS. Malema later withdrew the lawsuit. By June 2021 Brian Shivambu paid back R4.55 million and admitted that he received VBS money. Jacob Zuma defaulted on a R7.8 million loan that he obtained to finance his Nkandla homestead . In June 2020 eight people associated with VBS and
196-581: A process immediately began to assess and improve security measures at the President's private residences. As part of this process, the South African Department of Public Works & Infrastructure (DPWI) built a helipad, underground bunkers, security and their accommodation, a firepool, a chicken-run, and fencing around the entire complex. According to the ministerial handbook, the department can spend R100,000 on security improvements at
245-475: A swimming pool is a fire pool.” Statements by spokesmen have mentioned an apartheid-era law, the National Key Points Act , as explanation for the spending discrepancy, but that spending should come from a different department. The leaked documentation also hints at vastly inflated prices for the work done, much of it not going out to tender, and huge consulting fees. The initial story
294-406: Is a cooperative financial institution owned by its depositors or customers. They include mutual organization , mutual savings banks and cooperative banking . Unlike traditional banks , which prioritize shareholder profits, mutual banks focus on serving their members' interests. They reinvest profits back into the institution to benefit customers, offer a range of banking services, and often have
343-498: Is set to appear before the ANC integrity committee on the 02 September 2024 to answer for the money she received from VBS. Simelane allegedly received a R586,000 loan from VBS Mutual Bank through a company that provided the loan . On the 6th September 2024 embattled Justice Minister Thembi Simelane on Friday told MPs she took a loan from a financial entity that served as a fixer for VBS Mutual Bank at an interest rate of nearly 50% because she
392-631: The Constitutional Court subsequently found that Zuma's non-compliance with the report constituted a violation of the country's Constitution . Zuma ultimately apologised for using public money to improve his private residence and in April 2016 he was asked to resign by prominent public figures, including anti-apartheid activist Ahmed Kathrada , due to the scandal. In line with the Constitutional Court's judgement, Zuma repaid
441-548: The Public Investment Corporation (PIC) sued KPMG for 144 million rand (around US$ 9.5 million) it lost when the VBS Mutual Bank went bankrupt as a result of fraud. Its claim is centred on the rights issue and a revolving credit facility it participated in at VBS relying on financial statements audited by KPMG and its former senior partner, Sipho Malaba. Mutual bank A mutual bank
490-704: The South Gauteng High Court to stop distribution of the text message on the grounds that it violated the Electoral Act. On 4 April 2014, the court ruled that the wording of the message was fair comment and dismissed the ANC's application with costs. The ANC was granted leave to appeal the decision. On 6 May 2014, the Electoral Court ruled that the DA must retract the text message, finding that it wrongly targeted Zuma personally instead of
539-618: The Constitutional Court to enforce the Public Protector's findings. On 31 March 2016, the Constitutional Court delivered a unanimous ruling stating that the Public Protector's report was binding and Zuma and the National Assembly failed to uphold the country's constitution. The court ordered the National Treasury to determine the amount that Zuma must pay back and ordered Zuma to do so within 45 days of
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#1732776375758588-579: The Constitutional Court, which approved the recommendation in late July 2016. Complying with the Court's directive that the amount should be paid within 45 days of its approval by the Court, Zuma repaid the full amount in September 2016. However, he financed the repayment using a R7.8 million loan from VBS Mutual Bank , and allegedly defaulted on his repayments of the bond in August 2018. In August 2022,
637-645: The Parliamentary Ethics Committee found that former EFF deputy leader and now MK party member Floyd Shivambu had received VBS money through transfers from Sgameka Projects Pty Ltd. totaling R180,000 but that no evidence could be found that EFF leader Julius Malema had received any of the VBS Bank missing funds. In July 2024 former chairperson Tshifhiwa Matodzi was sentenced to an effective 15 years in prison on multiple counts of fraud, racketeering, money laundering and theft. Thembi Simelane
686-464: The President to condone any action or omission of the Public Protector. A provisional draft of Madonsela's report, under the working title "Opulence on a Grand Scale," was leaked to the Mail & Guardian in late November 2013. The title came from the text of one public complaint, which Madonsela reproduced in the report: "Like all South Africans I have recently read in the media the appalling story of
735-497: The President would have acted in violation of the Ministerial Handbook. Police prevented Helen Zille from approaching the compound on 4 November 2012, she intended "to see what a R250-million renovation with public money looks like." She was referring to the security upgrades of R246 million which is multiple times larger than security upgrades to previous presidents' homes. Zuma's spokesperson Mac Maharaj said
784-490: The Public Protector informed the President that she would be unable to conclude her report within the prescribed 30 day period. Section 3(2) of the Executive Members' Ethics Act states that: "if the Public Protector reports at the end of the 30 day period that the investigation has not been completed, the Public Protector must submit a report when the investigation has been completed". The President then suggested to
833-478: The Public Protector that she had failed to comply with the 30 day period and to report that the investigation was ongoing and whether the process was justifiable. The President and his lawyers tried to negate the validity of the investigation by requiring the Public Protector to indicate whether the President had the power to condone any non-compliance. There is no provision in the Constitution that authorises
882-566: The South African Institution of Civil Engineering, and the Association of Quantity Surveyors. The panel considered the five main upgrade components – the amphitheatre, cattle kraal, chicken run, visitors' centre, and swimming pool – and found that: The R7.81 million figure included R2.3 million for the swimming pool, R1 million for the amphitheatre, and R1.2 million for the cattle kraal. Treasury submitted its report to
931-505: The bank before it collapsed. After the bank's collapse it was found that the bank held R372 million in negative equity . A 2018 report released by the SARB in October found evidence of wide-scale looting, fraud and corruption. It recommended that bank leadership, public officials and auditors be criminally charged and held liable in civil proceedings. The report found that R1,894,923,674
980-544: The bank had a large negative impact on the funeral industry in Limpopo Province as the bank was unable to honour insurance and burial society obligations backed by the bank. It also had a devastating impact on stokvel and saving societies held by poor, predominantly black, South Africans in the Limpopo Province. In October 2018 the national government announced that it would not bail out South African municipalities that had irregularly deposited R1.57 billion with
1029-754: The bank planned to list on the Johannesburg Stock Exchange ; however, this never materialized. Most of its branches and clients were located in Limpopo province . Prior to 2014 the bank was relatively small and primarily involved in retail banking with many of its depositors consisting of burial societies and stokvels . The bank in turn issued mortgages and short-term loans to its clients allowing them to use their property or banking deposits as collateral. The South African Public Investment Corporation inherited its shares in VBS bank when it succeeded
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#17327763757581078-571: The bank's auditor, KPMG , were charged by the NPA on 47 counts of theft, fraud, corruption and contraventions of the Prevention of Organised Crime Act . Chairperson Tshifhiwa Matodzi, CEO Andile Ramavhunga and CFO Philip Truter were among those arrested and charged. As part of ongoing investigations, the Hawks arrested three additional individuals suspected of fraud on 16 November 2021. In October 2023
1127-723: The bank. The prudential authority filed for VBS bankruptcy at the North Gauteng High Court on 30 October 2018. On 13 November 2018 the North Gauteng High Court issued a final order to liquidate VBS mutual bank. Following liquidity problems, VBS Bank was placed under curatorship on 11 March 2018 in terms of the South African Banks Act, Act 94 of 1990, by the South African Reserve Bank. The collapse of
1176-590: The compound by the journalists, a contractor working at the site speculated that the costs of the expansion were likely to later increase. By October 2012, the Public Protector , Thuli Madonsela , was preparing to investigate the security upgrades, pursuant to various formal complaints lodged with her office in response to media reports. The first complaint had been lodged by a member of the public on 13 December 2011, and subsequent complaints were lodged by legal academic Pierre de Vos , Lindiwe Mazibuko of
1225-439: The cost of the upgrades had escalated to R215 million, with a further R31 million in works outstanding, and that, contrary to the government's claims, many of the state-funded improvements had exceeded Zuma's security needs as president. These included a swimming pool ( officially a firepool ), cattle kraal , marquee area, and new houses for relatives. It recommended that Zuma should repay the state, and added that Zuma had violated
1274-554: The court's approval of the National Treasury report. As instructed by the Constitutional Court, the National Treasury instituted an investigation – required to be completed within 60 days of the judgement – to "determine a reasonable percentage of the costs... which ought to be paid personally by the President". The investigation was conducted by a six-member panel comprising representatives of two professional quantity surveying firms, two professional engineering firms,
1323-467: The extra time they needed to study the report. Nevertheless, they suggested that they might return to court to challenge the report on grounds publicly argued by Police Minister Nathi Mthethwa : that it was the security cluster ministers, not the Public Protector, who had the authority to decide what was classified as a threat to the president and the state (and therefore to decide the reasonable limits of upgrades for security purposes). On 13 January 2013
1372-538: The government's code of ethics on two counts: failing to protect state resources, and misleading Parliament by telling it in November 2012 that the buildings and rooms had been "built by ourselves as family and not by government". Madonsela's final report, titled "Secure in Comfort," was released on 19 March 2014, shortly before Zuma's reelection , and mirrored the provisional report in its substantive aspects. In both
1421-453: The homestead was the subject of a major public controversy, sometimes referred to as Nkandlagate , concerning what were ostensibly security upgrades to Zuma's compound, at a cost of over R246 million. The use of public funds to make these improvements (including a controversial firepool ) received significant media coverage and political opposition. A report of the Public Protector found that Zuma unduly benefited from these improvements and
1470-404: The initial phase would include building a double-storey house and a guest house at a projected cost of over R19.4 million. As soon as the story broke out, government denied having a hand in the upgrades. The DPWI spokesperson contradicted initial statements by the government, "there is no work or extension project taking place at President Jacob Zuma's compound at Nkandla." During the site visit at
1519-611: The opposition Democratic Alliance (DA), and three other members of the public. The investigation was conducted in terms of section 182 of the Constitution and sections 6 and 7 of the Public Protector Act – which outline and regulate the investigatory powers of the Public Protector – and, insofar as complaints alleged that Zuma had violated the Executive Ethics Code, also in terms of the Executive Members' Ethics Act. On 1 November 2013, Madonsela shared
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1568-605: The opposition party adopted a "cowboy style" approach to getting the answers it wanted, and questioned Zille's use of the word "compound" to describe the homestead. COSATU , a member of the governing tri-partite alliance, asked for the overpricing to be reviewed. Shortly after the publication of Madonsela's report, the DA sent a bulk text message to Gauteng voters ahead of the 2014 general election which reads: "The Nkandla report shows how Zuma stole your money to build his R246m home. Vote DA on 7 May to beat corruption. Together for change." The ANC submitted an urgent application to
1617-520: The pension fund of the Venda bantustan government thereby giving it a 25% ownership stake in the bank. Largest shareholder in the bank was Dyambeu Investments which owned 26% of the bank, 51% of Dyambeu Investments was owned by the Venda Royal family. Prior to coming under curatorship in 2018 the bank gained notoriety in 2016 when it gave a R7.8 million loan to then President Jacob Zuma when he
1666-647: The private houses of public officials. Any costs above that must be covered by the official. Over R200,000,000 has appeared to be allocated by the department. The controversial firepool that was built is described as being part of "questionable security renovations". In January 2024, at an address in Barberton, Mpumalanga , ahead of the ANC's birthday celebrations ANC Secretary General Fikile Mbalula admitted that ANC MPs lied "in defence of our president [Zuma], we went to Parliament and opened an ad hoc committee and said
1715-493: The provisional and the final report, Madonsela found that Zuma had benefited unduly from the R246 million the state had spent on the upgrades. In her investigation, Madonsela said that the Ministerial Handbook had a maximum security spending of R100 000 should The Minister of Public Works issue approval. Since the house at Nkandla is privately owned by the President, he would only be granted R100 000 for security measures. Therefore,
1764-550: The provisional draft of her report with Cabinet 's security cluster, which included the Ministries of State Security , Police , and Defence , and which was viewed as dominated by Zuma loyalists. On 8 November, the cluster brought an urgent interdict against Madonsela in the Pretoria High Court , seeking to prevent the release of the provisional report. The ministers requested more time to review and respond to
1813-435: The provisional report, and also claimed that they had not been given a fair hearing during the investigation. The Minister of Public Works and Infrastructure joined their application. Madonsela said that the case was part of a series of state attempts to obstruct her investigation. In mid-November, however, the ministers withdrew the application, saying that the delay occasioned by the court process had already given them
1862-677: The report of the inter-ministerial task team published in December 2013, the Public Protectors' final report published in March 2014 and the SIU's report published in September 2014, as well as Zuma's responses to them. The second ad hoc committee challenged the findings of the Public Protector and referred the matter to security experts including the police minister in November 2014. On 28 May 2015, police minister Nkosinathi Nhleko , who
1911-427: The state for the benefit of its occupants. Zuma's property comprises 3.83 hectares . In 2008, according to Zuma, Zuma's family undertook a private construction project, using personal funds, to improve the homestead and build three new houses. In May 2009, pursuant to the 2009 general election , Zuma was elected President of South Africa , and – in terms of a Cabinet policy instituted under Zuma's predecessor –
1960-477: The state for the non-security upgrades – priced at R7.81 million by the National Treasury – in September 2016. The compound is situated on Nxamalala Farm in the rural region of Nkandla, KwaZulu-Natal , where President Jacob Zuma was born and raised. The land is owned by the Ingonyama Trust , which, through Zulu King Misuzulu kaZwelithini , administers KwaZulu-Natal's traditional lands on behalf of
2009-457: The sums of taxpayers’ money being spent on the private residence of President Jacob Zuma. This is opulence on a grand scale and as an honest, loyal, taxpaying South African I need to understand how this is allowed to happen. Strangely civil society is quiet. This is wrong and highlights the complete disregard which this Government has for the citizens of this country. Where is this money coming from and how has it been approved?" The report said that
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2058-531: The systematic failures highlighted in Madonsela's report. The court case was ultimately won by the DA when the Constitutional Court set aside the Electoral Court ruling on 19 January 2015. On 19 December 2013, public works minister Thulas Nxesi presented a report of an inter-ministerial task team which justified the public expenditure and cleared Zuma. On 28 April 2014, a parliamentary ad hoc committee set up to consider Zuma's response to Madonsela's report
2107-604: Was appointed by Zuma on 25 May 2014, released his report on Nkandla which found that the swimming pool, cattle kraal, chicken run, visitor's centre and amphitheatre were needed security features and concluded that Zuma does not owe the South African taxpayers anything. On 18 August 2015, the National Assembly adopted the report of a third parliamentary ad hoc committee which accepted the findings of Nxesi and Nhleko and cleared Zuma. Opposition parties Economic Freedom Fighters and Democratic Alliance subsequently approached
2156-585: Was ordered to repay the state for controversial improvements to his personal homestead at Nkandla . In mid-2018 the South African Reserve Bank (SARB) instructed municipalities to withdraw their deposits in the bank as the Municipal Finance Management Act prevented them from depositing public funds in mutual banks. This, along with mismanagement and corruption within the bank, created a liquidity crisis for
2205-488: Was referred to the next Parliament to be formed after the 2014 general election, citing insufficient time available before the 7 May election date. As of 11 August 2014, a Special Investigating Unit (SIU) mandated to investigate the matter by Zuma in December 2013 is suing the architect for R155.3 million in the KwaZulu-Natal High Court . On 12 September 2014, the SIU's report on their investigation
2254-535: Was tabled in Parliament. The SIU said that the Zuma family was enriched by the upgrades and blamed overspending on the architect and public works officials, who have alleged interference by Zuma and others who have all denied these allegations. The SIU also found that security measures were still inadequate despite the overspending. A second parliamentary ad hoc committee, established in August 2014, would consider
2303-624: Was transferred from the Bank to fifty three individuals between 15 March 2015 and 17 June 2018. According to the report, R16,148,569 of that money went to Brian Shivambu, younger brother of the former Economic Freedom Fighter senior politician and now UMkhonto weSizwe (political party) member Floyd Shivambu . The report also implicated the African National Congress 's deputy chairperson for Limpopo, Florence Radzilani , and treasurer, Danny Msiza . EFF leader Julius Malema sued
2352-486: Was unable to borrow money from a commercial bank on better terms. In February 2021, the liquidators for the bank sued their auditor, KPMG, for 863.5 million rand (~US$ 59 million) over its audit opinion on the now defunct bank. It was reported in February 2024 that KPMG had settled the lawsuit in a confidential out-of-court settlement for Rand 500 million (~$ 27 million). In July 2021, South Africa's largest asset manager,
2401-470: Was uncovered by the Mail & Guardian journalists Mandy Rossouw and Chris Roper. During that period, it was reported that the expansion to the compound would cost R65 million, paid for by the taxpayer. Expansion to the compound included the installation of a helipad , visitors' center, private military hospital and parking lot. The Mail & Guardian' s investigative unit, amaBhungane , uncovered that
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