LIMPOPO – The MEC for Treasury, Rob Tooley, and CoGHSTA MEC, Jerry Ndou, recently ordered a forensic investigation team to municipal managers, mayors and chief finance officers of municipalities that invested money to the tune of R1,5 billion with VBS Mutual Bank.
Tooley and Ndou gave the forensic team a three-month period to complete the investigation in the affected municipalities followed by a comprehensive report to be submitted to Premier Chupu Mathabatha’s Executive Council.
Among other things, the investigation, according to the report, is expected to determine whether the affected municipalities contravened any legal provision when they invested the money with the controversial bank.
Fifteen municipalities in Gauteng, North West and Limpopo invested money to the tune of R1,5 billion, mostly from equitable share, with the liquidated bank. The majority of municipalities were in Limpopo. National Treasury warned municipalities not to invest with the bank as it was a mutual bank but despite the red tape, certain municipalities continued to invest with the bank.
During the recent meeting with Tooley and Ndou at the Peter Mokaba Stadium, the provincial Treasury developed terms of reference for the undertakings of the forensic investigation.
According to the terms of reference, the investigation would include terms of investment with the bank, the amount, the period and dates of investment, interest earned if any and the money invested – be it equitable share, conditional grant or own revenue.
The team is also expected to probe how and why the money was invested, what process was followed and whether the process followed was consistent with the Municipality Investment Policy, the Municipal Finance Management Act (MFMA) and Municipal Investment Regulation. It is also expected to find out if any officials involved in recommending the investment received any incentive from such investment. DA Member of Parliament and Limpopo Leader, Jacques Smalle, said his party took the VBS investment saga to task when it became clear the ANC government was dragging its feet early this year. Smalle said the DA has already instituted criminal charges against accounting officers in May this year. “We are of the opinion that mayors who allowed these investments to proceed should be removed from office as they were willfully negligent in their duties in terms of Section 52 of the MFMA. We plead with the forensic task team to be transparent in their investigation and with Ndou to expose officials and politicians implicated in the scandal,” Smalle said.