South African police make arrests over notorious bank corruption scandal
18 Jun 2020

A number of people have been arrested by police investigating one of South Africa’s most notorious corruption scandals, the looting and collapse of VBS Mutual Bank.

VBS, which held the savings of many disadvantaged people and local municipalities, collapsed with more than £100m in debts in 2018. Much of the money had been siphoned into private bank accounts and some spent on property or luxury cars, investigators found.

Four people were detained in early morning raids on Wednesday in the provinces of Gauteng and Limpopo, with further arrests anticipated within 24 hours. One suspect is in quarantine after contracting Covid-19 and is expected to be detained shortly.

The head of the National Prosecuting Authority described the VBS scandal as “probably the biggest bank robbery in this country”.

“We have an obligation to all South Africans to deliver justice in this matter,” Shamila Batohi said. “It is our duty to the direct victims of corruption.”

The arrests constitute one of the first significant operations against corruption in South Africa since Cyril Ramaphosa gained power more than two years ago.

Those targeted by the Hawks, an elite investigation unit, include the bank’s former chairman, other senior executives and an auditor from the accounting firm KPMG.

They face charges of racketeering, corruption, fraud and theft, and could be jailed for life. Prosecutors described a “pattern of racketeering activity” and dozens more were implicated in the alleged theft. These include officials of the ruling African National Congress (ANC) party.

Ramaphosa has repeatedly promised to crack down on the graft that spread through government institutions, the ANC, parts of the bureaucracy and some law enforcement agencies under the nine-year rule of his predecessor Jacob Zuma.

However the president, a former labour activist turned tycoon, has been reluctant to threaten a fragile peace within the ANC between powerful networks promoted by Zuma and his own reformist supporters.

Politicians from the ANC and opposition parties have been tarnished by the bank’s collapse.

VBS was a little-known lender until it gained notoriety in 2016 for providing a £500,000 loan to the former president Jacob Zuma to reimburse the state for upgrades to his personal home including a swimming pool and amphitheatre.

By Jason Burke, The Guardian, 17 June 2020

Read more at The Guardian

Photo: GovernmentZA [CC BY-ND 2.0] via Flickr

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