Municipalities that made illegal deposits into the now defunct VBS Mutual Bank have started receiving some of their funds back.
This is according to the bank liquidators who say about R160 million has thus far been recovered and set aside for repaying entities and individuals whose savings were looted from the bank.
VBS’ liquidation also affected several municipalities in three provinces.
The municipality has recently received R22 million of the money that it had illegally deposited into the now liquidated VBS Mutual Bank.
Municipal Spokesperson, Matodzi Ralushai says the recovered funds will be used for service delivery.
“Payment processes have already started. We’ve received R22 million. We have confidence that in the end all those agreements will be done and the money will be able to come back to the municipality for us to continue with a normal service delivery using that money that was invested. One cannot rule out to that once you lose a cent through an investment, you feel the pressure of that cent. That is why we are happy that payment has started now.”
VBS liquidator, Anoosh Rooplal says Vhembe is one of 13 municipalities who will be receiving some of their funds back.
“To date, our collection efforts has resulted in an amount of R 159 million being available for distribution to all concurrent creditors. These are effectively creditors who have lodged valid claims with the bank. A first dividend of seven cents in the rand is being paid to retail depositors – 13 out of the 14 municipalities who had invested in VBS and who submitted valid claims – are also being paid seven cents in the rand. Each municipality would receive a different amount depending on the amounts that they originally invested with the bank.”
Fourteen municipalities in Limpopo, Gauteng and North West province had made illegal investments when the now defunct VBS Mutual Bank collapsed.
Individuals who had invested over a R100 000 into VBS have also been receiving some of their money back.
Arrests
Earlier this month, the Hawks arrested two suspects on allegations of corruption and maladministration in connection with the looting of the VBS Bank.
The Thulamela Local Municipality invested R30 million in the bank, but it managed to get it back before the bank collapsed.
According to the police, 25 people have been charged in the investigation. They face more than 100 charges.
VIDEO: SABC reporter Michael Makungo on arrests:
