• Another municipal official will appear in court on charges related to the VBS scandal. 
• The official was allegedly involved in the investment of R120 million of the municipality’s money in the now collapsed bank. 
• The Hawks say 27 people have been arrested so far, and more arrests are imminent. 

The chief financial officer of the Collins Chabane municipality was arrested for his alleged involvement in the investment of municipal money with the now broke VBS Mutual Bank.

Brigadier Thandi Mbambo said he allegedly contravened the Municipal Finance Management Act (MFMA) in connection with the investment of a whopping R120 million of the municipality’s money on 23 October 2017.

The municipal manager at the time, Charlotte Ngobeni, was arrested for the same matter by the Hawks’ Serious Corruption Task Team in March 2021. She has already appeared in court and has been released on R50 000 bail. She is due back in court on 9 May.

After one of her appearances in court,  National Prosecuting Authority spokesperson Sipho Ngwema said that on 31 May 2017, the municipality approved and adopted an Investment and Cash Management Policy, which came into effect on 2 June 2017. It prohibited the municipality from making deposits into the accounts of banks that were not registered in terms of the Banks Act.

This meant the municipality was not allowed to invest with VBS because it was not registered under the Banks Act.

It is alleged that Ngobeni received money for accommodation, meals, beverages, spa treatments and spa products from an FNB account, allegedly as an enticement for investing with the bank.

READ | Collins Chabane municipal manager in court for allegedly receiving gifts in VBS bank scandal

The municipality never saw its money again.

Later, it emerged that there was an alleged elaborate racket to draw in investors with presents, by targeting those who controlled the purse strings at municipalities.

They also paid commission to the people who wooed the investors with freebies like watches, spa treatments, and a line of credit.

The money would allegedly be funnelled out and stolen, and the books cooked to make it look like the bank was stable. It was not, and it lost around R2.2bn.

Signs that something was amiss at the bank emerged when pensioners and cooperatives could not get their money out of the bank.

Distraught pensioners were among those who tried to draw money from their savings, only to be told there was no money to give them. They slept outside in the hope that they had not been fleeced out of their life’s savings.

VBS Mutual Bank was declared bankrupt and placed and the Gauteng High Court in Pretoria granted a final liquidation order against it on 13 November 2018. In February, the first liquidation dividend paid out seven cents in the rand to some creditors.

Of the R159 million to be paid out, only about R110 million went to municipalities.

The latest person to be arrested in the saga is expected to appear in the Palm Ridge Specialised Commercial Crimes Court on Friday on charges of contravening the MFMA.

Mbambo said this brings to 27 the number of people arrested in the course of the investigation into what initial investigator Terry Motau called a “heist”.

Mbambo said more arrests were imminent.