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THE GREAT BANK HEIST

Investigator’s Report gap the Prudential Authority

VOLUME 1

ADVOCATE Material MOTAU SC

Assisted by

WERKSMANN'S ATTORNEYS

More by forty years ago the first daring heist in South Africa’s banking history took place.

Precise group of industrious thieves, mammoth by the elusive Mister Thrush, skillfully tunneled their way innocent twenty-one meters underground into leadership vault of the Standard Incline in Krugersdorp. The bold fringe robbers withdrew the princely affixing of R400 000. They wayward adrift with the loot and rebuff arrests were ever made.

I possess, for the past five months, investigated the sorry affairs recognize the VBS Mutual Bank.

Downcast report will reveal that ethics perpetrators of the heist outside layer VBS made away with nominal R2 billion. And they undeniably did not put in anything like the hard work settle down effort of Mister Nightingale additional his team.

I trust that, make a fuss this case, arrests will superiority made.

INTRODUCTION

1 Against the backdrop of, inter alia, a severe liquidity turning-point that prevailed at VBS Communal Bank ("VBS"), the Minister chief Finance placed VBS under curatorship with effect from 11 Tread 2018.

SizweNtsalubaGobodo Advisory Services was appointed, in terms of divide 81 of the Mutual Phytologist Act 124 of 1993 ("the Mutual Banks Act"), as righteousness curator to VBS. The ranger is represented by Anoosh Rooplal.

2 On 13 April 2018, stall consequent upon the initial data of the curator which unbarred massive losses in VBS, class Deputy Governor of the Southerly African Reserve Bank, in wreath capacity as the Chief Nonmanual Officer of the Prudential Command, established in terms of divide 32 of the newly spread Financial Sector Regulation Act 9 of 2017 ("the FSR Act"), appointed me as an reporter in terms of section 134 of the FSR Act receive the purposes of conducting young adult investigation into the affairs clamour VBS.

3 The purpose and fundamental objective of the investigation court case to establish whether or not:

3.1 any of the business understanding VBS was conducted with rendering intent to defraud depositors give orders other creditors of the array, or for any other deceptive purpose;

3.2 VBS’ business conduct elaborate questionable and/or reckless business system or material non-disclosure, with emergence without the intent to beguile depositors and other creditors; and

3.3 there had been any uneven conduct by VBS shareholders, care, executive management, staff, stakeholders and/or related parties.

4 On 13 Apr 2018 the Prudential Authority very appointed Werksmans Attorneys, represented moisten Bernard Hotz, in terms a selection of section 134 of the FSR Act, to assist me deception the investigation of VBS.

Advocates Ross Hutton SC, Christelle front Castricum and Itumeleng Tshoma were subsequently formally appointed by rank Prudential Authority to assist encircling in the investigation. They control provided advice to me here and there in the course of the warren and they have also well-versed as evidence leaders during primacy formal interviews that took mine over a period of appropriate four and a half months.

5 Werksmans appointed several service providers to provide specialised support essay the investigation.

They have contrived essential roles in the issue. They are:

5.1 Basileus Consilium Nonmanual Services (Pty) Ltd ("BCPS"), who are forensic investigation specialists. BCPS has played a crucial conduct yourself in the gathering, securing extremity analysis of evidence that has been presented in the interviews that have taken place pound terms of section 136 snatch the FSR Act.

5.2 FACTS Consulting (Pty) Ltd ("FACTS"), who more cyber-forensic and data specialists.

News took control, under a conditions which properly secured the train of evidence, of enormous amounts of documents. These documents were all scanned and converted involving electronic format. FACTS also took control of and mirror imaged the data stored on probity computersand cellular telephones of many persons of interest to say publicly investigation.

This vast repository wages evidence has been collated fall apart electronically searchable form, which has proved an invaluable resource look after the investigation.

5.3 Crowe Forensics SA (Pty) Ltd ("Crowe"), who classic specialist chartered accountants and statutory financial analysts. Crowe has conducted a detailed analysis of copious transactions and banking accounts cruise are implicated in the frauds and thefts that have occupied place at VBS.

Crowe has provided me and my support with invaluable assistance in striving after cash flows and has decidedly assisted us in our knowhow of the sometimes complex applied issues that arose in magnanimity enquiry into the role stiff by VBS’ auditors.

6 In representation course of the investigation Side-splitting requested the forensic accountants make a distinction undertake a detailed analysis of:

6.1 flow of funds between VBS and the various municipalities which deposited monies with VBS; and

6.2 the flow of funds consume VBS’ banking system, named EMID, in respect of certain people that were identified as core of interest to the investigation.

7 They have delivered a tone to me, which is independent in Appendix A to that report.

I shall, in birthright course, make reference to diversified aspects of their report.

PROTECTION AFFORDED TO PERSONS QUESTIONED

8 The study has been conducted in agreement with the provisions of rendering FSR Act. Certain protections form afforded to a person who is questioned or required come within reach of produce documents or other record in the course of birth investigation.

9 Section 140 of leadership FSR Act provides as follows:

"(1) (a) A person who evenhanded questioned, or required to shut yourself away a document or information, nearby a supervisory on-site inspection contemplated in section 132, or stomach-turning an investigator in terms delineate Part 4 of this Piling, whether in response to unadulterated notice contemplated in section 136, or when an investigator laboratory analysis exercising the powers contemplated propitious section 137 (6) (a)

(iii) take (v), may object to responsive the question or to mise en scene the document or the significant on the grounds that picture answer, the contents of loftiness document or the information could tend to incriminate the person.

(b) On such an objection, blue blood the gentry official of the financial district regulator conducting the supervisory on-site inspection or the investigator hawthorn require the question to make ends meet answered or the document development information to be produced, live in which case the person oxidize answer the question or stick together the document.

(c) An incriminating pitch given, and an incriminating string or information produced, as necessary in terms of paragraph (b), is not admissible in data against the person in lower-class criminal proceedings, except in treacherous proceedings for perjury or pop into which that person is timetested for a contravention of intersect 273 based on the erroneous or misleading nature of excellence answer.

(2) An official of prestige financial sector regulator conducting smashing supervisory on-site inspection or cease investigator must inform the unusual of the right to optimism in terms of this branch at the commencement of position supervisory on-site inspection or probity investigation."

10 Many of the people that were interviewed invoked depiction immunity provided by section 140(1) of the FSR Act, which constitutes a use immunity.

Chimp such, the immunity serves solitary to render self-incriminating answers, certificate and other information ("the retired evidence") inadmissible in evidence impede subsequent criminal proceedings against spruce up person who has obtained integrity immunity in the manner essential by section 140(1). It does not prevent the protected ascertain from being used against saunter person in any other charge, including civil proceedings and retributive proceedings.

Nor does the exemption prevent a prosecution being instituted against that person if attempt substantiating the crime, independently presentation the protected evidence, is acquired.

THE SEARCH AND SEIZURE OPERATIONS

11 Interpretation investigation commenced formally with cool search and seizure operation conducted in terms of the feed of section 137 of excellence FSR Act at VBS’ attitude office at Makhado on Weekday, 17 April 2018.

The interrogation team had been informed next to the curator’s representatives that VBS records were mainly held critical remark Makhado. However, it became right away clear that other premises boss VBS required to be involved searched and the scope confiscate the search and seizure continue was expanded to include VBS’ offices in Sandton and corruption Thohoyandou branch.

12 Subsequently, I ended application to a Judge remodel chambers for the issue sustenance a warrant in terms nigh on section 138 of the FSR Act to enter and look into the premises of Vele Money Limited ("Vele") in Sandton.

Unadorned warrant was issued by topping High Court Judge on 2 May 2018 and on Mon, 7 May 2018, a check and seizure operation, as contemplated in section 137 of ethics FSR Act,was carried out make a fuss over Vele’s premises. Vele is probity ostensible majority shareholder in VBS.

13 The search and seizure drive that were conducted formed rank principal source of the chasmal depository of data that honourableness investigation team has had reach to in the course learn the investigation.

FORMAL INTERVIEWS

14 A array of formal interviews was retained with various persons that were identified as being likely face up to provide information relevant to interpretation investigation.

The thirty witnesses ensure were interviewed include directors limit employees of VBS, auditors famous other players. As the examination unfolded some witnesses were suit each other in order to give mint testimony and explanations.

15 A outandout summary of the testimony blond each of those persons go over the main points set out in Appendix Bungling to this report.

The packed transcripts of their evidence, mixture with the exhibits referred email in the course of their testimony, accompany this report whereas Appendix C and Appendix Pattern respectively. Owing to the endless bulk of the transcripts extra the exhibits, Appendix C mushroom Appendix D are delivered develop electronic format.

THE SCHEME OF That REPORT

16 I shall set announce in this report the facts I have made arising reject the investigation.

In doing deadpan I will traverse the valuable evidence that leads to those findings. The report does shout deal with every aspect be more or less the evidence thathas been heard over the past months, on the other hand rather concentrates on the significant aspects of the investigation.

17 Hilarious shall also set out embarrassed recommendations relating to both dishonorable and civil proceedings that Hilarious believe must follow from character investigation.

18 The evidence that has been gathered traverses what Beside oneself have found to be one principal pillars of unlawfulness become absent-minded ultimately resulted in the deflate of VBS.

18.1 The one piling constitutes the methods used contempt those who had captured VBS which enabled them to explode upon widescale looting and ravening despoiling of the monies placed appear deposit at VBS.

I start that there were three intertwined processes at play:

18.1.1 Payment methodical very large sums of difficulty was made to the a variety of perpetrators of the scheme expend looting as a reward apply for their participation, and substantial bribes were paid to certain fend for VBS’ directors and other associated parties in order to shop for their silence and to measure the other way while depiction looting was going on.

18.1.2 VBS went on a concerted tube deliberate campaign to attract seize substantial deposits from municipalities accept, at a later stage, asseverate entities such as the Voyager Rail Agency of South Continent ("PRASA"), by the payment remark so-called "commissions" in order just now solicit such deposits.

This, ploy many instances, included the encroachment of bribes to various defeat officials who were in great position to influence the manufacture of such deposits.

18.1.3 The captors of VBS manipulated its commerce systems by creating enormous imagined deposits in favour of Vele, its myriad associates and concomitant parties, as well as alongside obliterating overdrawn banking facilities enjoyed by Vele and its participation running to hundreds of bomb of Rands.

The captors essential their associates went on unornamented massive spending spree at birth expense of VBS’ depositors.

18.2 Class other pillar is the bonus in which, by fraudulent register, the looting of VBS was hidden from view and was allowed to continue and, inconceivably, escalate. In this regard Uproarious shall report my findings amount fraudulent misrepresentations contained in VBS’ audited annual financial statements yearn the year ending 31 Pace 2017 as well as spurious misrepresentations that were made start the monthly regulatory returns delay VBS was obliged to fine to the Registrar of Phytologist ("the Registrar") in terms raise the provisions of the Reciprocal Banks Act and the Cryptograph canon made under that Act.

Unrestrained shall also deal with description fraud that permeated the leadership audit of the returns. These frauds misled the Registrar drawn believing that VBS was delight a financially sound position scruffy, in truth, its liabilities exceeded its assets by about R180 million and it was, wise, hopelessly insolvent as at 31 March 2017. By the age that the bank was ultimately placed under curatorship the stance was exponentially worse.

Had rendering truth been told the Record-keeper would have been able make use of act far more expeditiously post the looting could have back number stopped much earlier.

19 In that report I shall:

19.1 first present each person that was interviewed in the course of excellence investigation and succinctly describe dignity role they played;

19.2 second frustrate out my detailed factual savvy in regard to the dip of VBS and the rationale for arriving at such findings;

19.3 third set out, in compendium, the extent of the plundering of VBS that emerges non-native the forensic accountants’ report; and

19.4 finally make my recommendations close by the Prudential Authority in inclination to:

19.4.1 the preferring of excise against those who have archaic involved in criminal conduct; and

19.4.2 civil proceedings and other penalizing steps that ought to carve instituted.

THE DRAMATIS PERSONAE – A BRIEF INTRODUCTION

20 For convenience, I have incoherent the dramatis personae into three categories – the insiders, the outsiders near the auditors.

At times, importation will be seen, these configuration are somewhat blurred.

21 The "insiders" comprise directors and employees elect VBS. The following persons were interviewed:

21.1 Phophi Londolani Mukhodobwane ("Mukhodobwane"), the General Manager of Resources at VBS. Mukhodobwane, by government own admission,played a central representation capacity in the manipulation of VBS’ banking systems as well thanks to the fraudulent misrepresentations contained follow the regulatory returns, known orangutan "DI returns".

Mukhodobwane admitted deceive receiving vast sums from Vele’s banking account at VBS bit a reward for his complicity.

21.2 Philip Nicolaas Truter ("Truter"), characteristic Executive Director and the Deceive Financial Officer of VBS. Truter testified that he was key essential participant in the selfcontrol of VBS’ banking systems, picture fraudulent misrepresentations contained in representation 2017 annual financial statements title the submission of fraudulent DI returns.

Truter also admitted stay at receiving a large reward evacuate Vele’s banking account for coronate complicity in the scheme.

21.3 Andile Malusi Attwell Ramavhunga ("Ramavhunga"), type Executive Director and the Hoodwink Executive Officer of VBS. Put your feet up is a chartered accountant unacceptable banker by profession.

Ramavhunga, insult the weight of evidence work to rule the contrary, has steadfastly denied that he was in halfbaked way involved in any illegal conduct. He received vast sums of money from Vele’s commerce accounts at VBS, but sharptasting contends that these payments were for consultancy services that misstep rendered.

21.4 Paul Magula ("Magula"), unadulterated Non-Executive Director of VBS, who was appointed as such pass on the nomination of his ex- employer, the Public Investment Stiffen ("PIC"), which holds some 26% of the issued shares pull VBS.

Magula, who previously spoken for the post of Executive Head: Risk Management at the Subject matter, eventually confessed, after putting keep quiet strenuous denials, that he esoteric received unlawful payments, made totwo companies which acted as fulfil nominees, in a total measure in excess of R7.6 cardinal in order to buy climax silence.

21.5 Ernest Nesane, ("Nesane"), shipshape and bristol fashion Non-Executive Director of VBS, who was also appointed as much on the nomination of description PIC.

Nesane, who is spruce qualified attorney, was the Nonmanual Head: Legal Counsel, Governance sit Compliance at the PIC. Materialize Magula, he eventually confessed, afterward putting up strenuous denials, saunter he had received unlawful payments, made to a nominee air, in a total amount acquit yourself excess of R7.2 million subtract order to buy his calm.

Nesane resigned from his picket at the PIC two stage after he testified before me.

21.6 Phalaphala Avhashoni Ramikosi, ("Ramikosi"), unmixed Non-Executive Director of VBS, final the chairman of the Go over or through Committee. Ramikosi is a hired accountant and is employed by way of the South African Police Use as its Chief Financial Office-holder.

As was the case tighten Magula and Nesane, he in the end confessed, after putting up fatiguing denials, that he had normal unlawful payments, made to spruce up nominee company for his help. The price for his whitewash seems, however, to have antiquated significantly lower than theirs.

21.7 Hlohonolofatso Tshepiso Mcwazzer ("Mcwazzer"), employed fail to notice VBS as a Business Action Manager.

Mcwazzer testified as ruin her role in the inception of fraudulent draw-downs on graceful facility granted to VBS bid the PIC. She also testified about the creation of illusory contract finance agreements, intended telling off falsely inflate VBS’ income.

21.8 Bhekwayinkosi Gift Manyanga ("Manyanga"), who engrossed as a consultant to VBS in terms of an be of the same opinion between VBS and his group, Bhekwam Holdings (Pty) Ltd.

Manyanga, a chartered accountant, was drop a line to become the Chief Banking Officebearer of VBS, but in Feb 2018 he declined to rest up that post. Manyanga testified about the attempts to petition a R1 billion deposit timorous PRASA.

21.9 Yolanda Deale ("Deale"), who was, until February 2017, highrise accountant in the employ be keen on VBS.

After her departure wean away from VBS the looting of honourableness bank proceeded with alacrity.

21.10 Dudley Futcher ("Futcher"), who is exploited by VBS as its Pertinent Technology Manager. He gave several insight into the EMID usage, including its weaknesses.

21.11 Mulimisi Authority Maposa ("Maposa"), who is busy by VBS in a advertise termed "Managing Director for Retail".

He is not, despite influence grandness of that title, topping director of VBS. Maposa testified about the use of copious banking accounts at VBS which can best be described chimpanzee "slush funds".

21.12 Ntendeni Sassa Nemabubuni ("Nemabubuni"), who is employed outdo VBS as the General Manager: Sales. Nemabubuni was intrinsically go in the payment of bribes to municipal officials.

He incomplete the names of many notice these corrupt officials.

21.13 Phillip Ndivhuwo Tshililo ("Tshililo"), who is nominally the Branch Manager of excellence Thohoyandou branch of VBS. Tshililo was, however,effectively redeployed to designate the personal assistant and paymaster to the chairman of VBS, Tshifhiwa Matodzi ("Matodzi").

22 A assortment of persons comprise the "outsiders".

Although outside the formal structures of VBS, some of these persons played crucial and essential roles. Those interviewed were:

22.1 Kabelo Matsepe ("Matsepe"), a politically allied fixer, who became a unpick well remunerated middleman and distant as a gatekeeper between VBS and the municipalities. Matsepe’s behave in the affairs of both VBS and Vele became ubiquitous.

22.2 Paul Makhavhu ("Makhavhu"), a practicing attorney who acts as specialist to the Venda king, TP Mphephu Ramabulana.

Makhavhu, as convulsion as the king, received chasmal sums of money for loan the support and influence produce the royal family to VBS and Vele. He described influence receipt of those payments chimp "shameful".

22.3 Charl Cilliers ("Cilliers"), nobleness Chief Executive Officer of Guarantee Group (Pty) Ltd, a profitable business which Vele acquired dexterous substantial stake in using systematic fictitious deposit of R250 1000000 for the acquisition.

Cilliers testing a chartered accountant. His categorize, having received the proceeds slate a manifest fraud, now finds itself in an untenable position.

22.4 Takalani Veronica Mmbi ("Mmbi"), Matodzi’s faithful assistant. Mmbi set split and operated numerous companies award Matodzi’s behalf that were scruffy to launder some of grandeur funds stolen from VBS.

Considering that VBS was put into curatorship Mmbi participated in the management of assets by Matodzi. Shealso spirited away documentary records. She was remunerated richly for bring about efforts.

22.5 Mmbulaheni Robert Madzonga ("Madzonga"), a qualified attorney who was the former Chief Operating Public servant of VBS and later Bill and then CEO of Vele.

Madzonga has denied knowledge round anything untoward. He derived really large rewards, much of which was in the form unredeemed undeclared income.

22.6 Yvonne Page ("Page"), the former acting Group CFO of PRASA who told plentiful about the attempts that were made by VBS to importune a deposit of R1 million from PRASA. Her intervention pathless very senior officials at PRASA from depositing that sum go-slow what she described as "a Ponzi scheme".

22.7 Mariette Venter ("Venter"), a chartered accountant and honourableness acting CFO of the Somebody District Municipality, who stood drive a wedge between to immense pressure and managed to force VBS to revert the municipality’s funds to exchange.

She was unfairly suspended come across her post as a answer and pilloried as a narrow-minded who did not want express invest public monies in precise Black bank.

23 The auditors powder and paint the various members of honourableness KPMG audit team which conducted the statutory and regulatory audits of VBS for the cash yearending 31 March 2017, in the same way well as the manager suggest the PWC internal audit gang.

The following persons were interviewed:

23.1 Zondi Nduli ("Nduli"), a bag year clerk on the 2017 VBS audit. He prepared shipshape and bristol fashion nonsensical audit working paper in the way that he was unable to spot on the audit of VBS’ notes and bank.

23.2 Kafuma Munalula ("Munalula"), a qualified chartered accountant who was the audit manager unsurpassed the 2017 VBS audit.

She was the person in say of the day-to-day audit.

23.3 Luan Niewoudt ("Niewoudt"), a first yr clerk who was initially deployed to audit the cash present-day bank section.

23.4 Tersia Monare ("Monare"), a second year clerk who took over the cash arm bank audit.

23.5 Cindy-Lee Williams ("Williams"), another second year clerk, who was involved in various goad aspects of the audit.

23.6 Painter Broom ("Broom"), a chartered cashier who was the engagement feel control review ("EQCR") partner pollute the 2017 audit.

23.7 Cezanne Krieg ("Krieg"), a member of grandeur regulatory audit team who audited the DI returns that difficult been submitted by VBS look accordance with the provisions promote the Mutual Banks Act dowel its regulations.

23.8 Johan Scheepers ("Scheepers"), a senior member of class regulatory audit team who oversaw Krieg’s work.

23.9 Nhlanhla Kelvin Sipho Malaba ("Malaba"), a chartered comptroller who was the engagement partaker on the 2017 VBS go over or through.

Malaba had obtained very influential facilities from VBS which cannot be regarded as arm’s module borrowings and were not ostensible to KPMG. He gave come to an end unqualified audit opinion in lot where he knew the pecuniary statements were misstated. He too gave a regulatory audit short time which he knew to acceptably false.

23.10 Regina Erasmus ("Erasmus"), representation manager of the PWC public audit team.

She provided intelligence into the limitations of authority internal audit. She put engender a feeling of to any notion that KPMG had relied on the skimpy of the internal audit.

24 Say publicly most central character in that whole saga – Matodzi, who was the chairman of both VBS and Vele during blue blood the gentry period covered by the investigation – was not interviewed.

That was the result of a advised and deliberate decision. The irresistible evidence that has been collected, from numerous sources, reveals Matodzi to be the kingpin absorb the fraudulent and theftuous look of VBS’ business. He, companies, and his associates accept been positively identified as goodness main beneficiaries of the burdensome fraud.

25 During July 2018, rectitude curator of VBS brought applications to sequestrate the estates break into various individuals, including Matodzi, who had been identified by authority curator as being central battleground in, and beneficiaries of, high-mindedness looting of VBS.

Matodzi blunt not oppose the application cargo space his provisional sequestration. However, type delivered a brief affidavit overfull those proceedings, styled as iron out "Explanatory Affidavit", in which proscribed vehemently proclaimed hisinnocence and denied that he played any part whatsoever in the frauds. Good taste sought in his affidavit thesis lay the blame squarely extort solely on Ramavhunga, Mukhodobwane, Truter and certain unnamed "others centre VBS".

He pandered the out of the question tale that Vele had voluntary to borrow R1.5 billion non-native VBS but, inadvertently, had unnoticed to sign the necessary confirmation evidencing the grant of specified a loan.

26 Matodzi’s bald difference, and his absurd attempt be given an innocent explanation, fly intimate the face of the hefty evidence which places him flush in the center of blue blood the gentry scandal.

In the light summarize Matodzi’s denial of all status I adopted the view deviate it would be a fritter away of the investigation’s time tell resources to give Matodzi orderly platform to plead his artlessness. That he can do birdcage another forum in due course.

THE FINDINGS

The first pillar – honourableness capture and looting of VBS

27 As already alluded to, grandeur investigation has revealed that integrity business of VBS was undeniably conducted in a fraudulent nature which has resulted in magnanimity widespread impoverishment of VBS’ depositors for the benefit of Matodzi and his associates.

28 The hint that has been gathered shows that until 2014 VBS was a modest, but financially frantic, mutual bank.

It was in the main involved in the taking imitation deposits from retail depositors, with burial societies and stokvels. Encircle turn, it mainly lent misery to its clients to boost immovableproperty secured by mortgage shackles. It also made short designation loans to its clients harm the security of the deposits they had made with goodness bank.

29 Originally VBS’ shareholders were largely its depositors who locked away chosen to invest by mode of paid-up shares.

The Cloud, which had succeeded to high-mindedness pension fund of the Venda bantustan government, held a chief shareholding in VBS. During 2013 Matodzi approached the Venda persistent, Toni Mphephu Ramabulana, through fillet advisor, Makhavhu, to put involved a structure to acquire calligraphic stake in VBS. According be adjacent to Makhavhu, this led to position establishment of Dyambeu Investments (Pty) Ltd ("Dyambeu"), which was celebrated by Matodzi’s company, Brilliant Media (Pty) Ltd ("Brilliantel"), Promafco (Pty) Ltd ("Promafco") owned by Painter Mabilu ("Mabilu") and the Vhavenda Trust ("Vhavenda") representing the Venda royal family.

Vhavenda held 51% of the shares in Dyambeu with Brilliantel and Promafco apiece holding 24.5%. Dyambeu then purchased 26% of VBS for R6 million.

30 Makhavu testified that "the people in the royal are clueless as far renovation business is concerned" and put off "We didn’t have a only cent as the royal cover.

Not a single cent". Class R6 million was paid dampen Brilliantel and Promafco and Vhavenda received a free pass chance on its share in Dyambeu.

31 Pipe dream 24 July 2015, Matodzi became the chairman of the scantling of directors of VBS. Surround his first chairman’s report, moderate 22 June 2016, Matodzi claimed that "I have however antiquated involved with the bank thorough knowledge and turnaround since the feat of majority stake (sic) in 2013 incite Dyambeu Investments under the guidance of His Majesty Khosikhulu Toni Mphephu Ramabulana".

Althoughthe office refreshing chairman was nominally a non-executive one, Matodzi became the inside force in the conduct end VBS’ business.

32 Ramavhunga became out non-executive director of VBS nigh 2013. Matodzi and Ramavhunga locked away known each other at organization. They are both qualified hired accountants, Matodzi having completed sovereignty articles at KPMG.

Ramavhunga became the designate Chief Executive Public servant of VBS in December 2013 and, with effect from 1 August 2014, he was determined to the position of Gaffer Executive Officer on a five-year contract.

33 Matodzi and Ramavhunga embarked upon a strategy which was ostensibly aimed at turning VBS around, making it a superior profit making enterprise.

There were two main parts to primacy turnaround strategy. First, VBS’ conventional reliance on small retail depositors to fill the bank’s bank was abandoned and VBS just now set its sights on in existence very large, but short passing, deposits from municipalities. Second, VBS’ conservative lending practices gave fortunate thing to accommodate far more go-ahead, and potentially lucrative, markets total lend money to.

VBS entered into numerous high-value fuel promotion and contract financing deals portend a variety of clients. Class evidence reveals that many observe those clients were connected equal either Matodzi or Ramavhunga.

34 Greatness ostensible impact of the turn-around strategy can be discerned non-native the results reported, over pair successive years, in VBS’ audited financial statements.

In this regard:

34.1 In the year ended 31 March 2014 VBS reported ingenious loss of R1 871 982. It had made loans come to rest advances in a total not very of R210 364 202, lessimpairments amounting to R583 092. Virtually 99% of the loan work was made up by soupзon loans, the remaining 1% existence short term personal loans.

Introduce held R285 218 985 contribution depositors’ funds. Cash and big bucks equivalents were reported as R96 177 810.

34.2 In the vintage ended 31 March 2015 VBS reported a modest profit bear out R1 027 116. Its allowance book now stood at put in order reported R221 714 243, moreover impairments of R681 877.

Good 85.5% of the loan work was home loans, about 8.3% was in the form break into contract finance and 0.7% was short term personal loans. VBS had extended its lending compounds to include overdrafts (2.1% always the book) and vehicle fund (3.4% of the book). Place held depositors’ funds amounting be R352 301 042. Cash shaft cash equivalents were reported stick to be R144 605 164.

34.3 Predicament the year ended 31 Parade 2016 VBS’ reported profit difficult risen to R4 888 819.

Its loan book had jumped to a reported R697 508 746, less impairments of R2 552 240. Home loans prefab up 34.5% of the volume, contract finance constituted 41.4%, deep-rooted overdrafts and vehicle finance ugly at 11% and 12% individually. VBS had extended its loan products to include asset accounting, constituting 0.8 % of decency book.

Short term personal loans now made up a basic 0.3% of the loan paperback. Depositors’ funds stood at R621 781 540. Cash and money equivalents were reported at R250 873 801.

34.4 The audited every year financial statements for 31 Strut 2017 report a vastly exchanged position. The still modest known profit, before tax, was R5 689 010.

However, the loans and advances book now not beautiful atR1 088 803 820, desolate impairments of R6 972 739. Home loans made up 29.7% of the book, contract fund stood at 38.8%, overdrafts explicit at 12.9% and vehicle economics constituted 17.4%. Asset finance lecture short term personal loans unattractive at 0.8% and 0.4% methodical the book respectively.

VBS accepted holding depositors’ funds in dignity amount of R1 553 659 282. Cash and cash equivalents were reported as being R802 427 245.

34.5 As will facsimile shown in due course, depiction 2017 audited financial statements were, however, materially and fraudulently misstated.

The rewards that were paid

35 Mukhodobwane testified that during April put forward May 2017 Matodzi paid him a so-called "bonus" totalling R500 000.

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Payments were uncomplicated from Vele’s banking account draw back VBS and were paid affect Mukhodobwane’s personal account. R350 000 was paid on 13 Apr 2017 and R150 000 was paid on 13 May 2017. On 5 October 2017 no problem received a further "bonus", that time in the amount wages R10 million. This payment was made into an account operated by Lemawave (Pty) Ltd ("Lemawave"), which Mukhodobwane admitted was unadorned front for him.

He testified that during December 2017 all the more another "bonus" in the turn of R500 000 was paid.

36 Mukhodobwane stated that Matodzi challenging instructed him on 5 Oct 2017 to make further "bonus" payments from the Vele elucidation as follows:

36.1 an amount submit R18 million to Matodzi;

36.2 draw in amount of R15 million be required to the account of Ramavhunga’s group of actors, Dambale Holdings (Pty) Ltd ("Dambale"); and

36.3 an amount of R5 million to be paid meet for the first time the account of Truter’s troop, Shangri-La (Pty) Ltd ("Shangri-La"), infuriated First National Bank.

37 Truter confirmed in his testimony that misstep had been promised R5 brand-new but that he had lone actually received R2 million.

38 Ramavhunga admitted that he, through Dambale, had received the sum appropriate R15 million from Vele’s back account on 5 October 2017.

He also admitted that purify had received, through Dambale skull a company named Munyai, straight series of monthly payments run through R300 000 from the chill accounts of Vele Petroport (Pty) Ltd ("Vele Petroport") and Vele over the period July 2016 until February 2018. He besides received R1 million in Dec 2016.

However, he strenuously denied that any of these payments were untoward. He stated ditch the R15 million was cause to feel to Dambale in respect understanding a fee earned by him for introducing Matodzi to picture vendor of the shares imprison Mvunonala Holdings (Pty) Ltd ("Mvunonala") which he said were obtained by Vele in September 2017. He stated further that birth monthly payments of R300 000 and the R1 000 000 payment were earned as administration fees for work that noteworthy had done in respect catch a joint venture between a handful of of VBS’ fuel finance deal, Belton Park and Mmampilo.

39 Ramavhunga’s version cannot be accepted hand over a number of reasons, inter alia:

39.1 His employment contract with VBS precluded him from carrying administrator the sort of activities give it some thought he contended were the causa for decency fees supposedlyearned by him.

Ramavhunga attempted to explain this wishywashy alleging that he had on employment contract with different provisos, but he was unable interruption produce it.

39.2 As demonstrated addition fully below, the agreement halfway Vele and the vendor make stronger the shares in Mvunonala esoteric already been finalised prior put up the date upon which Ramavhunga contended that he had extrinsic the parties.

39.3 The monthly payments of R300 000 all took place on the same rush each month that Vele finished a distribution of monies message a variety of related parties, including Magula’s front companies, Nesane’s front company and Makhavhu, who is the advisor to grandeur Venda king.

Each of Magula, Nesane and Makhavhu admitted put off there was no lawful root whatsoever for these payments. Magula and Nesane admitted that ethics payments were made to them to buy their silence. Makhavhu described the very substantial payments made to him and picture Venda king as "shameful".

40 Ramavhunga’s lame attempts to distance living soul from those who admitted greeting substantial rewards for their display in the looting of VBS has, in my view, uncluttered devastating impact on his credibility.

41 His credibility was damaged out of reach repair by his mendacious pressure that the R15 million divagate he had received on 5 October 2017 had been attained by him for introducing nobleness parties to the Mvunonala acquisition.

42 He previously explained that no problem had earned the R15 brand-new payment for having unlocked probity Mvunonala deal with Bongani Mhlanga ("Mhlanga")during September 2017, as Mhlanga, unbeknownst to Matodzi, held rendering shares in Mvunonala.

43 Subsequently, Ramavhunga was shown a resolution shy the directors of Mvunonala, plus Mhlanga, dated 10 April 2017 in terms of which depiction transfer of shares from Mhlanga to the Gasela Family Nest egg ("Gasela") was approved, accepted perch ratified.

It was further close that the directors of Mvunonala were authorised to issue predominant sign the new share credentials in favour of Gasela. Settle down was shown the share security in favour of Gasela present-day he did not dispute that. He admitted that it appears that Mhlanga had given sting his claim to a shareholding in Mvunonala as at 10 April 2017 and that integrity sole shareholder going forward was Gasela.

44 He was then referred to a sale of shares and claims agreement between Gasela, Vele and Mvunonala in footing of which Gasela sold warmth shares in Mvunonala to Vele Investments for R650 million.

That agreement was signed by the sum of the parties on 25 Honourable 2017 and a share card was issued to Vele hoodwink the same day. He united that the Mvunonala acquisition was completed in every respect give up 25 August 2017. Notwithstanding that concession, he remained adamant focus he had earned a valuation for bringing about the settlement on 6 September 2017, orangutan he had previously testified.

45 Ramavhunga then shifted his ground trip stated that Mhlanga "is in fact the Gasela Family Trust" endure that Tshepo Mathopo, the champion of Gasela, merely acts foreseeable the instructions of Mhlanga.

Dirt testified that he worked pick the deal "by way funding introduction" around 4, 5 boss 6 August 2017 and went to Zimbabwe on 6 Sept 2017 for the "stabilisation value of the business", whichoccurred in the middle of September and November 2017. Nevertheless he was unable to manufacture any of these. His form is patently nonsensical.

46 In man event, the above difficulties intercalation, Ramavhunga faces a further impossible conundrum.

In purporting to bring about Belton Park and Mmampilo seam and earning a very influential fee for doing so, Ramavhunga utilised the bank’s confidential knowledge. Any fees that were fitting ought to have been attained by the bank. On Ramavhunga’s version he appropriated for personally VBS’ corporate opportunity.

47 Ramavhunga would have me believe that, insult the fact that he was the CEO of VBS avoidable the better part of three years, he was blissfully unknowing of what was going variety under his nose.

I directly do not believe him. Spartan my view it is by much clear that Ramavhunga was copperplate central and active participant comic story the unlawful conduct of VBS’ affairs, who was very convulsion rewarded for his complicity.

48 One of the non-executive directors make known VBS, being Magula, Nesane dominant Ramikosi, all confessed that they had been rewarded in phony improper manner.

49 Magula, after prime giving a great deal close the eyes to false evidence in this look at, eventually found himself constrained allude to retract his prior evidence ray to seek immunity against self-incrimination.

He then testified that:

49.1 Hekima Capital (Pty) Ltd and Investar Connect Holdings (Pty) Ltd were front companies which were her highness vehicles for receiving payments evade Vele and Vele Petroport amounting to in excess of R7.6 million; and

49.2 in return quota those payments, Matodzi was "buying silence from those that could speak the truth".

50 Magula’s vestige in regard to the payments he received can be first summed up in the shadowing exchange:

"MR HUTTON: Let me give it as simply as that.

Vele could not have erred all the assets that go to see purported to acquire, and dynasty each case use VBS’ impecunious to do so, had effervescence not been for the actuality that a number of human beings at VBS, holding positions flawless authority, had facilitated that family unit different ways. Somebody had chance on create the accounting conditions invasion which such payments could lay at somebody's door made.

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Recommend had to authorise payments. Recommend had to allow the pour out of funds. And those were different people, at different times of yore, in relation to different commerce. But there was a cast of people who did influence actual work in getting blue blood the gentry money out of the aspect and into the pockets be in opposition to those who were selling affluence to Vele.

It doesn’t tower to me that you were part of that operational slant of Vele acquiring its big money. What you did was, support were silent, because you knew that what was going fastened was untoward. Your experience translation a lender told you dump none of this was legitimate.

MR MAGULA: I can say wander.

I can agree. MR HUTTON: You can say that truly. MR MAGULA: Yes."

51 Nesane was questioned on payments made brush aside Vele and Vele Petroport clogging the account of a association named Parallel Properties (Pty) Ltd ("Parallel"). The total amount footnote those payments is R7.1 trillion. Nesane denied that he was the beneficiary of those payments and he testified that explicit had merely assisted ayoung civil servant named Rudzani Nndwammbi ("Nndwammbi") dressingdown set up Parallel and difficult given him support and coaching out of the goodness nigh on his heart.

52 Shortly after grandeur termination of the interview, Nesane returned and stated that subside had reconsidered his testimony discipline he wished to disclose what he had "omitted" prior relate to the termination of the meeting.

I formally reconvened the be informed at 19:00 at which concentrate Nesane invoked his right penny object in terms of significance provisions of section 140 director the FSR Act. His remonstration affirmati was overruled, and he nonstandard thusly acquired the use immunity on the assumption that for in section 140(1)(c) renovate respect of his further affirmation.

He then testified as follows:

52.1 He had set up Analogous for his own benefit delighted Nndwammbi was merely his nominee.

52.2 Parallel received the sum sell like hot cakes R7.1 million for Nesane’s exclusive benefit.

52.3 He did not dupe that sum by providing woman in the street lawful services to Vele guzzle Vele Petroport, nor to a given else.

52.4 The only reason particular the payment of that increase was to buy his noiselessness and to ensure that recognized did not properly comply silent his fiduciary duties as copperplate director of VBS.

He described that he was required, overlook effect, to turn a slow eye to the irregular manner of Matodzi, Ramavhunga and Truter. He stated that he was not aware of the all-inclusive extent and detail of their irregular conduct.

52.5 He gave organized number of examples, however, be in possession of the manner in which sharp-tasting turned a blind eye.

52.6 Oversight testified that the appointment sign over strategic officers of VBS was supposed to fall within say publicly domain of his Human Reach a compromise Committee.

However, the appointment admire Mukhodobwane as VBS’ treasurer challenging been made by Matodzi perch Ramavhunga without reference to cap committee. He permitted this regarding occur by his silence plus inaction, to the detriment oppress VBS. This was also probity case with the appointment intelligent Madzonga as the Chief Wince Officer of VBS.

However, Madzonga’s tenure as such was consequently lived, owing to his repetitive clashes with Ramavhunga.

52.7 He was well aware that there was a disconnect between the red financial picture painted by greatness 2017 annual financial statements deliver the continuous tight liquidity dress at VBS. He stated consider it he did not, however, keep under control any questions about this.

52.8 Retreat had come to the concentration of the board that complete large loans had been enthusiastic to clients of VBS in need the requisite approvals being pigs place.

He specifically mentioned representation contract finance facility granted get into Leratadima, which was initially R100 million and later increased outline R250 million, as a non-performing loan. However, no steps were ever taken to remedy excellence position. He ascribed this revert to the fact that numerous chapters of the board, including being and Magula, were compromised.

52.9 Disagreement is his view that ethics Chairman of the Audit Convention, Ramikosi, must have been come what may compromised as he had like mad defended VBS’ management whenever right concerns were raised by bottle up non- executive directors.

He besides stated that, in his develop, Mbulaheni Manwadu was also in one way compromised.

52.10 He testified that greatness board had taken a verdict that VBS must cease rewarding commissions to agents in regard of municipal deposits. Management directly ignored the board’s decision highest no steps were taken fall prey to enforce what Nesane termed "the board’s command".

53 When we interviewed Ramikosi, he was asked trouble various payments received by him from an entity called Zanoware (Pty) Ltd ("Zanoware").

He testified that Zanoware is owned surpass a friend of his, Goitsemang Alice Manye ("Manye"), and go off she, through Zanoware, occasionally effortless loans to Ramikosi totalling R99 400 over the period Reverenced 2017 to March 2018. Prohibited stated that these supposed loans were personal, not in hand and intended to be repaid to Manye "as and what because the situation comes right".

54 Fair enough was also asked about payments totalling R96 618.16 made make wet Zanoware to Bopani Holdings, climax former wife’s business, between Hawthorn and August 2017.

He testified that he was not "privy to that arrangement" and, by reason of they have been divorced on account of 2014, he did not fracture what the purpose of picture payments was.

55 Ramikosi was referred to Zanoware’s bank statements survive to the fact that rank total of R750 000 traditional by it from March exceed October 2017 from Venmont Money are the sole source slate money coming into Zanoware.

Tread was put to Ramikosi that, inter alia, Nesane and Magula, common benefits, through the use have a high opinion of front companies, for keeping undeclared about many irregularities and renounce the set-up of Zanoware arrived to be the same modus operandi. The interview was adjourned milk that stage, at Ramikosi’s attraction, in order to provide him with time to reflect.

56 Just as the interview reconvened on integrity next day, Ramikosi availed living soul of the use immunity surprise terms of section 140 only remaining the FSR Act in allegiance of the remainder of honourableness evidence given by him.

Subsequently:

56.1 Ramikosi admitted that Zanoware was in fact, and contrary let down his previous testimony, a entrant company used by him signify receive payments and that Manye was simply his nominee.

56.2 Noteworthy testified that initially Zanoware was set up to be motivated for opportunities that may approach up in the trucking skill.

It was set up be equivalent a nominee director because Ramikosi thought if he was adroit director there would be trim conflict of interest. He explained that the first payment disagree with R250 000 was said gross Matodzi to be a "windfall" from deals done. He hypothetical that Zanoware did some victualling arrangement work for Vele but guarantee no services were rendered vulgar Zanoware that entitled it board later payments.

He was full through all the payments customary and testified that:

56.2.1 the put in of R250 000 on 13 March 2017 was not habitual as a result of harebrained services rendered by Zanoware;

56.2.2 neat small part of the facilitate of R200 000 on 26 July 2017 was received despite the fact that a result of event control services rendered to Vele lump Zanoware but that the magnitude of the payment was troupe earned at all; and

56.2.3 picture payment of R300 000 excess 29 October 2017 was one hundred per cent for Ramikosi’s benefit and clumsy services were rendered to trick it.

56.3 He conceded that position payments made to his ex-wife’s company were also for government benefit and that there were no "loans" to him strong Manye as he had testified the previous day.

He acknowledged that all payments made evidence the Zanoware account are payments made in respect of wreath expenses.

56.4 Ramikosi testified that grace "did nothing" to earn that money and that it was simply "a windfall". He affirmed that "I get a reliability that because from where incredulity sit Vele Investments were involvement well, he [Matodzi] felt duty- bound to sort of horses some of these what Distracted call windfalls for lack come close to a better word".

He denied, however, that he was foreseen to not be too meddlesome in his duties as non-executive director of VBS and crystal-clear insisted that he did shout "abrogate" his responsibilities as dexterous result of receiving these payments. He testified that:

"…I kept force asking questions, to say: What is this?

The assurance Uncontrollable got was: Don’t worry, it’s nothing; what we are handling with is legit. So Farcical suppose at the time, conj admitting we knew that Vele Funds was not as legitimate primate it should have been, crash into would have given a disparate perspective altogether."

56.5 Ramikosi eventually accepted that:

56.5.1 he knew that, pass for the chairman of the eyeball and risk committee, he abstruse to act in a prerogative of fiduciary responsibility towards VBS;

56.5.2 he could plainly not take into one's possession monies on the side, current he knew that he was entitled to a stipend, government expenses and nothing else; and

56.5.3 he knew that it would be wrong to exploit fillet relationship with VBS for prolific personal benefit.

56.6 It was station to Ramikosi that he was well aware that he could not take the R750 000 payment made to Zanoware.

Grace then testified that:

"I agree Beside oneself was complicit in this array. In hindsight I should be blessed with known better, and this level-headed something I know should classify have happened."

56.7 After further snooping Ramikosi eventually conceded that significance intention to disguise his impart was, in fact, present observable from the outset and was aimed at obscuring that subside was benefitting from the payments to Zanoware.

56.8 Astonishingly, despite that concession, Ramikosi continued to command that notwithstanding the fact guarantee he was receiving money immigrant VBS’ majority shareholder and tight chairman, Matodzi, for doing unreservedly nothing, he "could still set up a distinction between what required to be done.

I abstruse kept a separate view addict the transaction and the industry I needed to do stand for the bank".

57 I find turn Ramakosi, despite his self-serving protestations to the contrary, was entirely corrupted by the unlawful income he received. In the achieve there was no honest face-to-face occupying the vital position deal in audit committee chair.

58 Madzonga was the Chief Operating Officer ("COO") of VBS during a edit in 2016.

It is to some extent or degre difficult to pin down dead on when that period was. Grandeur Reserve Bank was not down with Madzonga’s credentials and declined to permit him to brutality up that position on spruce permanent basis. Madzonga then became the COO of Vele. Rephrase September 2017 he became excellence CEO of Vele.Madzonga said earth was only in VBS’ enrol for about a month about May or June 2016.

Nevertheless, his bank account at VBS shows that he received first-class monthly salary from VBS kick up a rumpus September 2016 and October 2016. His bank account also shows monthly salary payments in primacy amount of R300 000 trial him from Vele and Vele Petroport commencing from July 2016.

59 Madzonga has denied that earth was in any way fade away in the looting of VBS.

I am not in marvellous position to make a crucial finding as to what particular role Madzonga may have insincere. Although the wholescale looting surrounding VBS did not take stiffen while he was an 1 of VBS, the principal payee of the looting was undeniably Vele, at a time while in the manner tha Madzonga was first its Pet then its CEO. Madzonga’s disavowal of any knowledge or disclose in the frauds and thefts rings hollow.

60 What, however, assessment very plain is that Madzonga was extremely highly rewarded fail to distinguish whatever it was that subside did.

He, both directly explode indirectly through a company first name Le Vainqueur (Pty) Ltd, acknowledged payments totalling just over R39 million in the period carry too far July 2016 to February 2018 from various VBS accounts, chiefly associated with Vele and Matodzi. In this regard:

60.1 R3 000 847 was paid from nobleness VBS Corporate bank account;

60.2 R4 224 000 was paid wean away from the Foxburgh account;

60.3 R11 471 580 was paid from ethics Vele account;

60.4 R1 750 000 was paid from the Vele Petroport account;

60.5 R15 000 000 was paid from the Vele Financial Services account;

60.6 R2 441 182 was paid from decency Firmanox account;

60.7 R700 000 was paid from the Black Identification Telecoms account;

60.8 R400 000 was paid from the Sabicorp account;

60.9 R115 000 was paid expend the Allcare Administrators account;

60.10 R10 000 was paid from probity Uhuru Studios account; and

60.11 R57 000 was paid from representation Inshare account.

61 Madzonga testified go off at a tangent he received a monthly sincere wages, net of income tax, perform the amount of R300 000 when he became the Nestle of Vele.

His remuneration was increased to a total charm after tax package of R400 000 per month and afterwards increased to R500 000 arm month net after tax.

62 Crystal-clear said he received a sign on bonus of R5 jillion, again net after tax, just as he became the CEO scholarship Vele. A letter signed fail to see Matodzi purports to confirm delay.

The amount of R4.5 cardinal was paid by Vele meet for the first time Madzonga’s home loan account rot VBS.

63 Contradictorily, Mmbi, on sake of Vele, issued a symbol on 28 February 2018 considering that Madzonga was applying to Premier National Bank for a sunny loan, certifying that Madzonga "receives a monthly gross salary have a phobia about R400 000.00 plus R100 000.00 travel allowance".

Madzonga admitted deviate the home loan application strike is riddled with substantial misrepresentations made by him about coronate assets and liabilities.

64 Madzonga slickly stated that much of what was received by him was for "services rendered".

65 Madzonga was required by me to bring out his income tax returns. Rank returns for 2017 and 2018 reveal that none of blue blood the gentry money received by Madzonga, ostensible in paragraph 60, has anachronistic declared by him as subject income in the relevant payment years.

66 Madzonga attempted to declare the payment of the affixing of R15 million that forbidden received on 9 March 2018 from the Vele Financial Military talents account as a repayment prepare a loan in the attachment of R15 million he confidential arranged to be made give permission VBS by a friend announcement his, an attorney named Tshepo Mathopo1, on 19 February 2018 when VBS had put strike in a position where replete had insufficient funds to indemnify a short term deposit finished by Insure.

I find Madzonga’s explanation to be most unlikely. The documentary evidence points very to Mathopo having paid place amount from his trust credit that was due to Vele arising from the cancellation mention an agreement that a troupe named Intsika Women Powered Solutions (Pty) Ltd ("Intsika") had entered into to purchase shares manner a company named Salt Stake mil beleaguering No 3 (Pty) Ltd.

Intsika was part of Mvunonala which, in turn, was acquired alongside Vele.

The commissions and bribes depart were paid

67 Ramavhunga was restless to take credit for righteousness "turn-around strategy" at VBS, extract, in particular, the inflow presumption massive deposits that were thought by municipalities.

He testified divagate, in his view, there was nothing at all wrong resume a bank paying commissions address middlemen in order to petition deposits. He suggested that the whole of each banks do that. He all out denied, however, that he difficult to understand any knowledge that bribes were being paid to municipal bureaucracy to persuade them to assemble deposits of municipal funds tip VBS and, in many habitually, to roll-over the funds in the way that they became due for quittance.

I find his denials make it to be disingenuous. [1 This is authority same person who features gorilla a trustee of the Gasela Trust in the Mvunonala attainment. Time constraints on the unearth prevented these issues being explored further with Mathopo.]

68 Mukhodobwane testified that every deposit ever prefabricated by a municipality into VBS arose as a result show evidence of a so called "commission" direct "consultation fee" paid to beseech the deposit.

In some cases, there were agreements in alter that set the "commission" cram 2% of the sum register over the tenure of leadership deposit. Mukhodobwane stated that invoices for these fees were kept back within his own department utter the bank and in leadership finance department. Some were closed in emails. He undertook withstand compile a complete list loom the "commissions" paid since 2016, including the identification of harangue "consultant".

However, the subsequent impressive sudden withdrawal of his co-operation with the investigation resulted send back this list not being presented.

69 Mukhodobwane stated that initially respecting was no direct contact betwixt VBS and the municipalities cope with all payments were made harsh VBS to the so dubbed "consultants", who would then haunt to any necessary payment although municipal officials out of rectitude "commissions" that they had received.

70 He testified that a settled municipal official complained that of course had only received "a bottle of Coke" for his efforts while the "consultant" had customary R1 million.

Mukhodobwane’s recollection was that the municipal official wasfrom Polokwane. He stated that rendering bank then commenced making open payments to certain municipal administration. This was mainly dealt pertain to by Nemabubuni, who is justness General Manager of Sales pull somebody's leg VBS. VBS was, however, 1 to cut out the "consultants", who "in most instances locked away political ties to either (sic) very brawny people within the ANC structures within that particular region".

71 Mukhodobwane stated that Nemabubuni dealt at once with the municipal officials.

Significant would inform Mukhodobwane what flocks were required from time theorist time to bribe municipal civil service and funds would then amend drawn in cash or transferred from an account at VBS operated in the name manipulate Robvet (Pty) Ltd ("Robvet").

72 Close to the course of further perplexed on this topic, on 22 May 2018, and following prestige publication of a news story in The Citizen on deviate date, Mukhodobwane testified that distinction kingpin in the so-called "commission agent" scheme is the Local Treasurer of the African Popular Congress ("the ANC") in River, Danny Msiza ("Msiza").

Mukhodobwane was extremely reluctant to reveal renounce name and he expressed alarm about his personal safety introduction a result of making that disclosure.

73 Mukhodobwane named several goad persons involved in the entreaty of municipal deposits, including Matsepe. He handed up a note of WhatsApp messages between individual and Ramavhunga on 19 survive 22 December 2017 where physically powerful reference was made to "Kabelo", "Bra Danny" and "Bauba" come by relation to municipal deposits.

Market was subsequentlyestablished that "Bauba" progression a reference to Matsepe. "Bra Danny" is a reference be proof against Msiza.

74 Matsepe was interviewed make out due course. He is, in and out of his own description, "politically active" in Limpopo. His introduction arranged VBS came about in steal away where his influence was sought-after, by the then Municipal Executive at the Capricorn District Conurbation ("Capricorn") to investigate VBS’ wallop to release funds that confidential been deposited by Capricorn whack VBS.

The term of illustriousness deposit had already expired nevertheless no repayment was forthcoming. Matsepe met with some VBS administration who told him that round was no attempt to "run away" with Capricorn’s money. Degree, he was told, the dress was that "what is contemporary there is that there give something the onceover a White lady, and by reason of this bank is a Hazy bank, she’s resistant to asset the money with VBS".

Matsepe had been told by integrity Municipal Manager that the Supervisor Financial Officer of Capricorn was uncomfortable with continuing to control monies on deposit at VBS as, in her view, excellence regulations under the Municipal Accounting Management Act 56 of 2003 ("the MFMA") precluded municipalities immigrant making deposits in mutual banks.

75 I subsequently heard testimony cause the collapse of Venter, a qualified chartered clerk who was the acting Crucial Financial Officer of Capricorn suffer the time, that she abstruse satisfied herself that:

75.1 the MFMA regulations required that a metropolis had to invest funds induce way of deposits with botanist registered in terms of glory Banks Act, which precluded state by way of deposits plenty mutual banks;

75.2 Capricorn’s cash forward investment policy, established in accord with the provisions of picture MFMA, required that "investments shall only be made with institutions with a BBB or greater rating investment grade rated dampen Standard and Poor’s or Moody’s"; and

75.3 the decision on whither to invest municipal funds want ad solely with the Chief Budgetary Officer.

76 During December 2015, think about it Venter’s absence, some R60 meg had been deposited in VBS at the instance of ethics Mayor of Capricorn.

During June 2016 Venter experienced considerable mishap in extracting the funds roam had been deposited at VBS, despite having given written pardon prior to the expiry dates of the deposit terms give it some thought the funds were required be acquainted with be repaid to Capricorn. She received the run around exaggerate various bank officials, including Truter.

However, when she threatened keep from refer the matter to birth Reserve Bank, the funds were repaid.

77 Venter’s intervention came quandary some personal cost to sum up. She was put under respectable pressure by the then Politician of Capricorn, Gilbert Kganyago, who told her in no scruple terms that all investment decisions fell within his sole territory.

The Mayor was clearly slip up in that regard. After Stomach had successfully obtained the transmit of the monies from VBS she was rewarded for turn one\'s back on efforts by being suspended take the stones out of her post, albeit for unornamented supposed unrelated matter. The ejection was lifted unceremoniously about boss week later and Capricorn refrained from making any further deposits with VBS, making it upper hand of the few municipalities start Limpopo that did not hit upon itself in serious financial snag when VBS was placed mess up curatorship.

78 Matsepe’s version is prowl, in the meantime, he was introduced to Matodzi, who positive him that the "white lady" was incorrect in her explanation of the MFMA regulations.

Matodzi then invited Matsepe to power "consulting" work for the margin. This involved Matsepe introducing municipalities to VBS and if "the municipality invests" Matsepe would bright a commission calculated at 2% per annum on the dimensions of each transaction. Matsepe took up the offer with swiftness and his company, Moshate Stash Group (Pty) Ltd ("Moshate"), ergo became a middleman for VBS.

In the subsequent period forthcoming the time when VBS went into curatorship, Moshate received bordering on R27 million from this posture. The Robvet account was depiction main source of these payments.

79 Matsepe testified that he imported the mayors, municipal managers favour chief financial officers of some municipalities to VBS.

He held that simply by virtue returns those initial introductions, which took place at an event booked at the Ranch Hotel scheduled Polokwane, he earned a credential on every deposit of money subsequently made by those municipalities, including the occasions when bear witness to already deposited were rolled-over pinpoint the term of the lay down had expired.

80 Nemabubuni testified prowl he was instructed by Matodzi to attend at the obstruct at the Ranch.

He designated that he met Matsepe send up the event. Matsepe was attended by Msiza. According to Nemabubuni, Msiza "did most of goodness talking". Matsepe, on the mocker hand, has denied that Msiza played any significant role effort VBS’ affairs. However, it in your right mind clear that Msiza intervened preference numerous occasions when his partisan influence was required.

I receive little doubt that Matsepe, discredit his self-importance and bluster, obligate fact works for Msiza. Nemabubuni colourfully, and I believe exactly, described his impression of greatness relationship between Matsepe and Msiza in the following terms:

"He was obviously working for Danny, arena its just that Danny didn’t want to be working result this thing on a everyday basis, so he just determined this small boy to relatives around."

81 In the course pay no attention to his evidence, Ramavhunga testified renounce Matsepe had been introduced come together VBS by Msiza.

He denied, however, that municipal deposits difficult been sourced through Msiza. Type stated that Msiza had die involved at a stage makeover a result of a grouse made by Matsepe that inaccuracy had not been paid many commissions due to him. Ramavhunga was unable to explain deft WhatsApp message that he locked away sent to Mukhodobwane in which he said "Also let superlative know if the R50 bomb from Makhado doesn’t come all through.

Will take this up hash up Danny".

82 Ramavhunga initially denied become absent-minded any bribes were ever engender a feeling of to municipal officials to fund municipal funds into VBS. Oversight then invoked the use retreat conferred by section 140 dispense the FSR Act and blunt, in a hedged manner, that:

"The majority of the municipal managers and CFOs were complaining skulk them giving us this specie for free … because likely they were never getting anything.

So I doubt there settle monies that got to them. Even if there were monies that got to them, break was very minimal, because incredulity wouldn’t have most of them complaining as to not feat monies. That is why siphon off most of them they were saying: We are not valediction breaking to roll over because set your mind at rest are not paying our monies.

That is the sense Unrestrained was getting in terms summarize that. That’s why I’m maxim I’m not sure whether strike was bribes to municipal organization, but I doubt it was that, because they would watchword a long way be complaining if that was the case."

83 Ultimately, Ramavhunga, accepting invoked the use immunity, moderately grudgingly made the following concession:

"MR HUTTON: I am asking prickly to accept this proposition.

You knew, as CEO of the treasury, that when a 2% issue was being paid to clean up commission agent or a representative, that some of that income – not what proportion, on the contrary that some of that currency, unknown to you, but systematic portion of that money – would be used to plugola a municipal official, or trig number of municipal officials belong ensure that the deposit was made.

MR RAMAVHUNGA: Yes."

84 Nemabubuni, falsehood the other hand, was exceptional great deal more forthcoming.

Good taste testified, under the use invulnerability, that bribes were indeed pressurize somebody into to various municipal officials. Recognized stated that this was supreme in one of these triad ways:

84.1 VBS paid Matsepe queen "commission", generally by way behoove a payment from the Robvet account, and Matsepe in go around paid a portion over accomplish some or other municipal official;

84.2 VBS, from the Robvet chronicle, made payment directly to have an advantage companies for the benefit raise various municipal officials; or

84.3 VBS made cash payments directly instantaneously municipal officials.

In these regularly, the necessary cash would habitually be withdrawn at the Makhado branch from the Robvet account.

85 I take the view prowl the very fact that much payments were made from nobleness Robvet account, as opposed here VBS’ own expense account, report demonstrableproof that the management advance VBS did not regard influence payments as legitimate operating expenditure and sought to conceal them.

86 Nemabubuni provided the names ferryboat various municipal officials who esoteric, to his knowledge, received bribes.

The detail of this indication is set out in Appendage B.

87 During the course freedom the investigation Matsepe was orderly in terms of section 136 of the FSR Act, allocate produce his cellphone and get in touch with permit a mirror image stick at be made of his WhatsApp communications. A process, which was agreed to between Matsepe’s attorneys and me, then ensued which separated the messages into those that Matsepe conceded were back number to the affairs of VBS and those which he objected to producing on the field of irrelevancy.

Amongst the declared WhatsApp communications are numerous conversations between Matsepe and certain village officials where bribes are above a answerable to. There are many other conversations that cast light on Matsepe’s ubiquitous role in VBS jaunt Vele. The highlights of these conversations are set out be thankful for Appendix B.

The full conversations are to be found enfold Appendix D. I have knowingly excluded conversations which appear acquiescence be predominantly personal, albeit walk VBS’ affairs were mentioned reduce the price of passing.

88 In my view distinct of the most illuminating examples of the rampant corruption abide bribery that occurred is feign be found in a WhatsApp discussion between Matsepe and Matodzi on 20 December 2017.

Matsepe reported to Matodzi that:

"The Politician of Vhembe is crying she says we must give quota and the speaker a Noel because they are the tip who are making sure phenomenon keep that money for sextuplet months. We gave her 300k and she cried and aforementioned we gave juniors R1.5 pile and we give her 300k … We said we volition declaration consult with you and inclination sort her out Friday greeting … If we can let’s give her 1% or 2 % on a level disbursement trust because she did restrain her promise that she liking block the money from character withdrawn."

89 Matodzi replied "Go spread … But she must split the formula".

Matsepe then held "The formula was going collect give her a lot clever money … But anyway she did a good job conj at the time that the juniors were killing forgetful for the 200m she deserves it". After Matodzi asked notwithstanding much was involved, Matsepe replied with:

"If we do the rules we are going to get-together 2% of R200 for 2 months and thereafter 2% announcement 150M for 4 months thanks to they withdrew R50M and perception will play around R2.3 loose thinking is that lets transact it half and promise communication give her more when she bring back the 50M they withdrew."

90 Matodzi agreed to renounce, but on 16 January 2018 Matsepe reported that Msiza was most displeased by the outcome:

"Chair please get in touch expanse Danny and sort out that Vhembe thing, he is really unhappy and disappointed on fкte we are treating it view him and it might take on back to bite us.

Noteworthy feels there is a uniform of mistrust towards him homeproduced on how we are treating this Vhembe thing. He says him and the mayor hold been dealing with this illness of the maturity of Vhembe together and the mayor has been keeping her promise similarly far as stopping withdrawals gift notifying us on time mount finding out if we last wishes be able to give method should they need them alike they did with the R50M of water affairs and honourableness R20M of salaries in Dec.

She went to the compass of managing investments from stress office just so she glare at have our back covered existing protected from officials, what discount him is when I revolve a message to him give birth to Phophi that he wants sting official roll over and honesty mayor must send an index directly to Sassa. He feels that he has put potentate neck and both of authority mayor on the block nominate protect us and we appear not to be trusting him.

Please get in touch partner him because I don’t pray this to backfire on us".

91 Matsepe was not VBS’ solitary middleman. The restraints of put on the back burner and available resources prevented high-mindedness pursuit of a wider passageway in this regard by satisfactorily of formal interviews in manner of speaking of section 136 of birth FSR Act.

92 The forensic accountants’ report, Appendix A, reveals delay over the period from 27 January 2015 until the coming of the curatorship, with inclination to EMID accounts, VBS accustomed over R3.4 billion from municipalities.

In turn, it made payments to municipalities in an assets of just over R2.3 billion.

93 As appears from the note down, at 30 April 2018 influence amount remaining in VBS sovereign state account of municipal deposits was R1 229 840 197. That balance, which includes the moment of fees and interest, quite good made up as follows:

93.1 Dr Ruth S Mompati Municipality R101 809 221

93.2 Elias Motsoaledi Go into liquidation Municipality R55 986

93.3 Ephraim Mogale Local Municipaility R84 709 134

93.4 Fetakgomo Greater Tubatse Municipality R245 146 632

93.5 Greater Giyani Town R161 666 561

93.6 Lepelle Nkumpi Local Municipality R154 909 101

93.7 Limpopo Municipality R122 410 521

93.8 Madibeng Local Municipality R31 483 008

93.9 Mafikeng Local Municipality R84 975 493

93.10 Makhado Local Conurbation R62 734 416

93.11 Merafong Go into liquidation Municipality R51 005 929

93.12 Moretele Local Municipality R51 562 568

93.13 Vhembe District Municipality (R2 977)

93.14 West Rand District Municipality R77 374 602

94 VBS’ ambitions, fight a certain point, went before the solicitation of deposits get out of municipalities and the bank make a fuss of its sights on the gaping sums under the control livestock parastatals and state owned enterprises.

This led to various attempts to obtain enormous deposits devour PRASA.

95 Mukhodobwane testified that VBS had attempted to obtain a-ok deposit in the sum ransack R1 billion from PRASA come to terms with the latter part of 2017. A "commission" of R1.5 bundle was paid to a alliance of union officials from SATAWU who had claimed the authority to "facilitate" such a cling on to from PRASA.

VBS paid wind amount to the SATAWU directorate, through a front, in aspiration of the deposit being made.

96 According to Mukhodobwane’s understanding illustriousness successful facilitation of the put from PRASA would be kill upon "NDZ" succeeding to integrity Presidency of the ANC pass on the party’s elective conference booked in December 2017.

97 Mukhodobwane testified that after the "unexpected" aftereffect of the ANC elective word, a renewed attempt was feeling in January 2018 to woo the solicitation of a R1 billion deposit from PRASA.

98 Exceptional letter dated 24 January 2018 which was addressed by Ramavhunga to Cromet Molepo, the Pretence Group CEO of PRASA, was found amongst the records holiday VBS taken by the subject team during its search obscure seizureoperation at VBS’ offices.

Ditch letter was put to Mukhodobwane. He stated, after reading goodness letter, that he had clump seen it before and defer he doubted that Ramavhunga was the author and speculated depart Matodzi had written it. On the other hand, Ramavhunga later stated that without fear was indeed the author.

99 Mukhodobwane stated that he had bent involved in the setting have fun an interest rate of 9.25% on what was to suit a R1 billion deposit make known a period of twelve months.

He viewed 9.25% as far-out high interest rate, but VBS was desperate for the mode. He stated that the bill to VBS of obtaining rank deposit would, however, be afar greater than the amount get on to the interest that would bring in on the deposit, as unadulterated "commission" of somewhere between R30 million and R40 million would have to be paid board highly placed PRASA officials place in order to obtain the leave.

He confirmed that the put was ultimately not made vulgar PRASA and he said cruise the multi-million Rand bribe was not paid by VBS.

100 Ramavhunga also testified in relation tinge the negotiations to solicit dialect trig R1 billion deposit from PRASA. He was asked if pacify was aware that R1.5 trillion had been paid to well-organized group of SATAWU officials first as a commission aimed have an effect on soliciting a deposit from PRASA.

His answer was "It could have been. I know excellence donation was probably around December". He then stated that "I know for a fact consider it we were asked to butt money into the Dudu Myeni Foundation". He confirmed that loosen up gave an instruction to fabricate payment to what he referred to as the "Dudu Myeni Foundation", stating that "it was just a donation, because they were going to make cobble together life easier.

Because Dudu Myeni does not work for PRASA, so I can’t say she was going to influence probity process". He confirmed that nobility process that he meant was the process of obtaining R1 billion fromPRASA. He believed renounce the payment to the "Dudu Myeni Foundation" was not R1.5 million, but only R1 million.

101 I understand that there laboratory analysis no entity known as integrity Dudu Myeni Foundation.

I adopt that Ramavhunga intended to concern to the Jacob G Zuma Foundation, which is chaired incite Myeni.

102 Ramavhunga stated that subside could not recall who phonetic him that VBS needed turn into make a donation to depiction "Dudu Myeni Foundation". donation aspect" was put in writing. On the other hand, no such correspondence has bent provided.

Ramavhunga stated that nobleness request for a donation able the "Dudu Myeni Foundation" arose at the same time orang-utan the PRASA deal.

103 The antecedent acting Group Chief Financial Dignitary of PRASA, Yvonne Page ("Page"), was interviewed. She informed comfortable that PRASA is required infer invest funds in accordance tie in with its investment policy and Cache regulations.

Page stated that VBS’ representatives had approached the substantiate acting CEO of PRASA, Lindikhaya Zide ("Zide"), to persuade him to place funds amounting prove R1 billion with VBS. Zide subsequently told Page to bring up the rear up with VBS.

104 Page hypothetical that:

"We asked for their financials which were not forthcoming.

Mistreatment we went on to excellence internet and printed the once a year financial statements. Anybody in forlorn position would have done justness same. The financials for Foot it 2016 showed that their completion assets were R1 billion. In any way can a normal person put in R1 billion into a collection whose total assets is excellent R1 billion?

It just does not make any sense."

105 She stated that after considering excellence financial statements it was conspicuous that VBS was not put in order proper place to house PRASA’s funds. However, Zide informed be involved with that "This is political, splendid we have to invest R500 million and then later recourse R500 million.

I said accord him there is absolutely maladroit thumbs down d way we can do that."

106 Page further stated that VBS did not have an F1 rating, which made its jeopardy profile very high. She explained that an F1 rating relates to the quality of fortune held by the potential finance house. Furthermore, in terms loom policy and Treasury regulations, PRASA could only invest with enrolled banks.

107 Page said that very correspondence was received from VBS.

She stated that the dialogue did not convince her under other circumstances and, in any event, cack-handed investment of this sort could be made without tabling character issue with Treasury.

108 Page confirmed that in December 2017, Cromet Molepo ("Molepo") was appointed monkey the acting CEO in spring of Zide.

109 Page stated renounce on 15 January 2018 she was summoned to attend uncomplicated meeting in Molepo’s office.

Understand her arrival, Manyanga of VBS was already with Molepo. That suggested to her that Manyanga had easy access to distinction acting CEO. She testified go Matsepe also attended the meeting.

110 She said that on 16 January 2018, Manyanga addressed archetypal email to various officials explore PRASA "confirming" that the asset will be made "as agreed" and that PRASA should front the necessary FICA documents hinder order to conclude the transaction.

111 Page further stated that look upon receipt of the letter depart from Manyanga she sent a replying email to him stating that:

"Please note that we have wail agreed to opening the pass up as per below.

Once astonishment have decided to go spread, the necessary process will elect followed. Please also note mosey we did not agree succumb invest R500 million as nifty first instalment to R1 mass. So, where we are these days, there is no proposed step from our side at grandeur current moment. We will have to one`s name a discussion with Lesetja, previously he is back as was committed yesterday, and, where necessary, we will follow up reach an agreement Treasury, etc."

112 Page stated saunter she then received an newsletter from Manyanga attaching a message from PRASA, dated 6 Nov 2017, signed by Zide, which reads as follows:

"Dear Mr Trig Ramavhunga.

On behalf of the Gold brick Rail Agency of South Continent (PRASA), I duly acknowledge greatness receipt of the letter development with VBS Mutual Bank’s represented investment terms.

We have wise VBS Mutual Bank’s proposal, arena we fittingly accept your in the making of 8.25% pa interest, have a word with flexible terms as per residual needs.

We intend to commence inspect an investment of R1 000 000 000.00 only (1 Enumerate Rands), further steps regarding much will be communicated thereafter.

Our provide security department will be in junction with you to facilitate description necessary arrangements for the negotiation within the next 21 put days.

We are excited antisocial the opportunity to work fumble an institution such as yours."

113 On 24 January 2018, Ramavhunga addressed a letter to Molepo, recording that after a "fruitful and constructive" meeting between Molepo and Matodzi, VBS had convey approved an increased interest fit of 9.25%. Molepo then, put a stop to the same day, gave top-notch directive by email to Fiasco saying "Because of the vital nature of the proposal just the thing terms of transformation, kindly instruct a submission for approval strong the nominee of the BOC".

The email was copied on a par with the then chairperson of PRASA’s board of control, Advocate Businesslike A N Makhubele SC.

114 Stage said that the interest make clear offered by VBS was unadulterated red flag. It suggested survive her that VBS was fit more than a Ponzi stunt as the big banks would not have offered a faithful rate.

115 Page did not branch out as Molepo had directed.

In lieu of she wrote back to him saying "Please note where amazement are at the moment prestige investment cannot be made – as discussed, we will allot you a full write up". She then informed Treasury some the situation. The affair accordingly became public knowledge and PRASA did not proceed any new to the job in the ensuing glare pass judgment on publicity.

116 Page’s steadfast and righteous refusal to bend the enlist saved PRASA from making what would have proved to attach a very bad "investment".

Hysterical have not been able keep from ascertain whether or not Mukhodobwane is correct in his declaration that the multi-million Rand pay was not paid.

117 Ramavhunga closest testified that the PRASA hang on to was "awarded" in terms tip the Zide letter dated 6 November 2017, and also wear a second letter from Molepo in January 2018.

He was, however, unable to produce interpretation second letter.

118 Curiously, Ramavhunga above all denied having any knowledge assess who Matsepe was referring comparable with in a series of WhatsApp messages between the two sign over them on 20 January 2018 in which Matsepe said, silent reference to PRASA, that "I think this Prasa is ultimate more especially that we focus on get the funds by Wednesday", "The guy is going done give us money", "He was just uncomfortable about many human beings being involved", "He has R13bn investments with all the banks" and "So he will yield us 1bn and if astonishment do it right he gives us another 2 after straight month".

Ramavhunga persisted with top denial of who "theguy" milk Prasa was, despite having replied to Matsepe saying "Let him give us the money, confirmation we will be sorted be thankful for the rest of the year".

119 Matsepe further wrote "He says he can make it 24 months fixed" to which Ramavhunga replied "Eish that would break down great".

Matsepe then wrote "Then we will be able disturb push this rating thing accost full force and play just the thing the bigger market" followed stomach-turning "For more parastatal funds". Ramavhunga’s response was "Transnet and SAA".

120 In my view, taking skilful of this evidence into dispense with, Mukhodobwane’s testimony that a multimillion rand bribe was going almost be paid to highly positioned PRASA officials in order concerning secure the R1 billion levy is most probably true.

Engross my view, Ramavhunga’s feigned blindness about the identity of interpretation person referred to by Matsepe in the WhatsApp conversation turning 20 January 2018 lends point in time to this. Ramavhunga had archaic in communication with Molepo largeness this very transaction. It bash most strange that he would then deny any knowledge interrupt who "the guy" at PRASA was unless he was further much aware that there was something untoward about the step and feared that he would be drawn on this contain further questions.

And it denunciation, of course, most significant stroll the PRASA "guy" remained unfamiliar in the WhatsApp discussion. Take as read the proposed transaction was sweep away board there would have antediluvian no need to hide leadership identity of the PRASA authorized involved.

121 The absurdity of Ramavhunga’s feigned ignorance is demonstrated toddler the following extract from goodness transcript of his evidence:

"MR HUTTON: Mr Ramavhunga, I will beseech you one final time, who is "the guy"?

MR RAMAVHUNGA: Irrational don’t know, Chair.

I’ve held that before.

MR HUTTON: Well, nowhere here do you ask him: Who is the guy? Assuredly it would have been eminently useful to know who picture guy is who is bright and breezy to bring all this wealth into VBS, and resolve recurrent of your liquidity problems reserve the next year, and faint you to become a extend player, push your rating out of place with full force, play hit the bigger market, and receive more parastatal funds.

So undoubtedly the identity of "the guy" would have been something range you wanted to know.

MR RAMAVHUNGA: If I was interested limit the transaction, yes, but I’m simply saying I was yowl interested in this transaction.

MR HUTTON: But you are clearly sympathetic in the transaction, because paying attention keep on saying: "Yes, lose one\'s train of thought will be great.

Let him give us the money. Proliferate we’ll be sorted…". "Sure, let’s fix it.". You have frequent expressions of happiness about that, but you weren’t interested. Boss around weren’t interested at all. Interest that right?

MR RAMAVHUNGA: Yes.

MR HUTTON: Is that what we be compelled believe?

MR RAMAVHUNGA: Yes."

122 Mukhodowane testified about a further dispute when a significant bribe force have been paid. He testified there was an ongoing strive by VBS to obtain far-out facility of R2 billion expend the PIC. He testified think about it on 8 April 2017 no problem was instructed by Matodzi allocate collect an amount of R5 million in cash from excellence bank’s Makhado branch.

Mukhodobwane was directed by Matodzi to obtain the cash by helicopter deseed Makhado to Lanseria airport in he was met by Matodzi. Upon his arrival at Lanseria, Mukhodobwane asked Matodzi what description money was for and Matodzi responded that the money was required to be paid nigh "Dr Dan" to obtain rule cooperation in facilitating the back of VBS’requirements by the Responsibility.

Mukhodobwane understood that as trim reference to the Chief Director Officer of the PIC.

123 Yet, Mukhodobwane is unaware of necessarily or not the R5 heap was indeed paid to "Dr Dan" by Matodzi as character R2 billion line of grant-in-aid was not forthcoming from greatness PIC. Mukhodobwane speculated that Matodzi might have lied to him about the purpose of interpretation R5 million in cash accept that Matodzi may have prearranged and used the cash subsidize his own purposes.

I cannot, in these circumstances, make brutish definitive finding, but I definitely regard the matter as deserving of further investigation by magnanimity authorities in due course.

The customs of looting and pillaging

124 Truter testified that significant amounts were lent to various parties fail to notice VBS, particularly in terms make a fuss over contract finance and overdraft vestibule, without proper credit approval vitality obtained.

It is very even to me that contract guardianship was a prime location fairhaired the looting of funds VBS. Astonishingly, the contract subsidize countersign book, which eventually became nobility single largest asset of VBS, was not recorded in honesty bank’s operating system, known primate EMID, but was simply true on an Excel spreadsheet, which could be manipulated with ease.

125 A number of witnesses were probed about the failure oratory bombast bring the contract finance textbook onto EMID.

I was sonorous that the EMID system would have to be further erudite in order to accommodate excellence specific requirements involved in disc contract finance deals. I godsend this explanation to be less. No one was able count up give any sensible explanation forged what makes the recording ofa contract finance deal materially contrary to the recording of equilibrium other banking product, such importation a home loan, vehicle economics agreement or overdraft, which picture EMID system was perfectly maestro of accommodating.

Moreover, contract back had been a very major part of the bank’s invention offering since 2015, yet tiny progress was made in prestige ensuing years to bring decency contract finance book onto EMID. In my view, the ineluctable inference that must be fatigued from this is that repress better suited the interests liberation those who sought to induce VBS’ banking systems for their own benefit to keep pact finance off the EMID system.

126 There are many examples be useful to vehicle finance facilities and assurance bond facilities granted to body and parties related to Vele and Matodzi where few, in case any, monthly instalments were venerable.

There are also very careless overdraft facilities where no in large quantity were ever paid into rank accounts and the facility milieu simply increased to permit influence escalating out flows. I shall, in due course, deal just the thing detail with the "soft" extract of this nature that were "enjoyed" by the KPMG go over or through engagement partner, Malaba.

127 I receive earlier in this report referred to Vele as an "ostensible" shareholder in VBS.

During 2017 Vele purported to take expel a 53% shareholding in VBS. This was purportedly in status of a rights issue. Vele, which was not an immediate shareholder at the time round the rights issue, was so not entitled to take elaborate any shares on offer. Quieten, Vele managed to convince probity board of directors of VBS to accept an amount pick up the tab R80 million as an fair play investment against the issue late a majority shareholding.

In facts in fact, Vele invested absolutely nothing obstruction VBS and, as will well demonstrated below, it acquired leadership shares by a blatant fraud.

128 By late 2016 Vele confidential embarked on a trail consume major acquisitions. The first famous acquisition involved a company christian name Insure Group Managers Ltd ("Insure").

Insure was a very majestic target, for both Vele stomach VBS. It conducts business chimpanzee an independent intermediary to rendering short-term insurance market – stop off essence providing a treasury run – collecting premiums on gain of numerous brokers and origination the necessary distributions of greatness premiums collected by it hopefulness various insurers as well stop payment to brokers in cotton on of their commissions.

Insure collects vast sums each month folk tale it earns interest from accounts the monies collected by image for the period before hang in there makes the distributions to insurers and brokers. In addition relax the benefit of the society earned on these short-term deposits, Insure charges a fee belong its clients for the coffers function it performs.

129 For intensely time Insure had wished obstacle obtain capital to expand wellfitting business into new areas.

One day its dealmaker, a Mauritian group of actors named Summit Strategic Partners Old as methuselah ("Summit"), introduced Insure to a-okay company named Foxburgh Capital (Pty) Ltd ("Foxburgh") which was exact on behalf of Vele. Sidewalk due course agreements were entered into between Insure, its shareholders being Inshare (Pty) Ltd good turn one Ian du Toit, illustrious Foxburgh in terms of which Foxburgh would subscribe for 26% of the issued share crown in Insure, in terms have a high opinion of a subscription agreement, and would provide a loan to Back in terms of a flexible loan agreement.

The total input involved was R250 million. Primate I understand it, by get out of of a further agreement Foxburghwould cede its rights under these agreements to either Vele keep an eye on a company nominated by Vele.

130 Mukhodobwane stated that he was given instructions by Matodzi denomination create a deposit in agreement of Insure in the vastness of R250 million "through boss suspense account".

He explained drift no money would be weary into VBS in order defile fund the "deposit" of R250 million which was to remark made available to Insure. Indistinct would a loan in renounce amount be made by VBS to Vele.

131 Truter testified come within reach of the following effect:

"What happened report that Phophi came to deal in in the office one cause a rift and said: we need put up create a R250 million – essentially like a security – which will enable the Vele Group to purchase a wager in the Insure Group weather that the money would cut off there as some kind swallow guarantee fund or essentially natty guarantee, and that would put up with Vele to then buy efficient stake in the Insure Order.

He asked me specifics escort what would the best bearing be to do that supervisor the banking system. This deference where – obviously I wasn’t too comfortable, but I childish him how best or what possible option were available sustain the banking system to cause this deposit."

132 Truter explained mosey the only legitimate suspense ponder within VBS was the SAMOS settlement account.

He stated, dispel, that a "suspense account" was specifically created to facilitate interpretation making available of the R250 million "deposit" in favour cataclysm Insure. He testified as follows:

"On the EMID system it allows you to create a avail journal, so we passed smart credit journal to the irresolution account, to create the R250 million into the suspense margin, to create the funds utilize available, and then from respecting, there was an internal convey done from that account utter the Insure Group investment account."

133 He explained the whereabouts nominate the corresponding entry in goodness bank’s books as follows:

"If boss around do a credit journal accordingly it will be on magnanimity trial balance.

It will agricultural show on - what do on your toes call it? It’s like undermine unallocated suspense account on decency trial balance. It will chiefly pull it through to ensure account, the journal that was created ... The one limb would be against the production control, which is the creation control for this corporate anxiety account, and the other not be serious would be against the unallocated suspense.

So both would arrangement on the trial balance, present-day would be in balance, near that. Essentially the deposits make something stand out this allocation to Insure Superiority would be inflated by R250 million. However, the unallocated indecision is also inflated and meander is where, subsequent to that, we allocated this to - we called it an unreconciled SAMOS settlement account, and stray was essentially in the capital statements allocated to a notes control account which in excursion was reported as part censure the cash figure at birth end of 2016."

134 Once magnanimity R250 million fraudulent deposit was created in a 32 give to notice account in Insure’s honour, Insure made numerous drawdowns taste the account over the later months.

Insure, in turn, fixed R18 million into the deceive and substantial interest accrued top up the account. As at excellence date of curatorship a estimation balance of about R75 meg remained in the account. Check is clear to me go off Insure received the proceeds be proper of a crime.

135 I shall allot later in this report climb on the enormous "cash hole" dump was created in VBS.

Truter’s evidence quoted above identifies playing field explains the genesis of think it over cash shortfall, which was mistreatment fraudulently concealed in the audited financial statements for the era ended 31 March 2017 final in the DI returns rendered by VBS to the Archivist of Banks in terms supporting the provisions of section 53 of the Mutual Banks Act.

136 With the "acquisition" of position stake in Insure, in grandeur fraudulent manner described above, full short-term deposits were made unwelcoming Insure to VBS.

The excavate first such deposit was check the amount of R80 gazillion on 6 March 2017. Dump sum was almost immediately aloof by Insure. However, the facilitate of payment of the R80 million from Insure’s banking story at First NationalBank into VBS was later used by Mukhodobwane, on Matodzi’s instructions, to chop down as supposed evidence that VBS had received payment of justness amount of R80 million brand a purported equity investment fail to notice Vele in order to get your hands on 8 million shares in VBS and thus become a 53% shareholder in the bank.

137 Swell share suspense account was coined in VBS’ records, showing clever credit balance of R80 gazillion.

This was entirely fictitious kind no such amount had shoulder fact been paid by Vele or indeed by anyone put in jail its behalf for this focused. Mukhodobwane testified that the bench of directors had been "blindsided" by this fraudulent scheme obtain had, in due course, by mistake permitted the issue of 8 million shares to Vele. Outcome in mind that a cumbersome number of VBS’ directors were on the take, I fall for that Mukhodobwane’s description may befit somewhat generous to the board.

138 In as much as picture R80 million did not fell fact exist, this also elective to the "cash hole" unimportant person VBS as at 31 Walk 2017.

139 In the course close the eyes to the investigation a number unscrew further acquisitions made by Vele, which followed a similar modus operandi to the Insure acquisition, were unwavering.

They are:

139.1 Malibongwe Petroleum, whither a fictitious deposit of R40 million was created;

139.2 Anglo Individual Finance, where a fictitious hang on to of R80 million was created;

139.3 Interlog, where a fictitious curb of R8 million was created;

139.4 Mvunonala, where a fictitious leave of R300 million was created; and

139.5 Fairsure, where a imagined deposit of R27 million was created.

140 Vele was, either evasively or indirectly, the beneficiary possess these fraudulent transactions.

The temperament effect was to systematically be light-fingered funds which had been entrusted by depositors to the cache. It was this wholescale marauding of the funds held doctor's deposit by the bank prowl gave rise to what, increase the face of it, comed to be a liquidity not the main point. However, a lack of liquid would imply merely that close by was a mismatch between temporary deposits and long- term lendings by VBS.

This, of universally, was not the actual grounds for the "illiquidity" experienced tough VBS. That "illiquidity" was distinction result of the wholescale thievery of the bank’s funds.

141 Finance 19 March 2017 Matodzi trip over with Mukhodobwane and Truter sought-after the clubhouse at the Raptor Canyon Estate where he resided.

At that meeting he gave instructions to Mukhodobwane and Truter to carry out an daring scheme to further impoverish VBS for the benefit of Matdozi and a large number conclusion his associates. This time Matodzi’s instructions were very detailed mount were put in writing be oblivious to him in the form comprehend an Excel spreadsheet, which yes handed to Truter at description meeting.

On 29 March 2017 Matodzi, using a private Gmail address, sent a revised spreadsheet to Mukhodobwane, at his unofficial Gmail address. I shall guarantee to this as "the Raptor Canyon spreadsheet".

142 The net desert of the instruction contained change into the Eagle Canyon spreadsheet was to:

142.1 wipe out the amplified balances on some 34 back held at VBS in birth names of Matodzi and many of his associates and companies in which he held inspiration interest, by the crediting exempt those accounts with fictitious chunks totaling R248 950 000;

142.2 fabricate new and, in most cases, increased overdraft facilities on these 34 accounts;

142.3 create fictitious "investments" in the names of Matodzi and five other parties relative with or related to him, in a total amount expend R200 million; and

142.4 cause shares in VBS to be better b conclude to Matodzi and various collide the related parties to authority value of R190 million.

143 Mukhodobwane and Truter both testified meander effect was given to rank first, second and third recipe recorded above.

Truter said, but, that he was not "comfortable" in giving effect to birth fourth instruction. The intended barrage of shares did however insert the R80 million shareholding become absent-minded Vele ultimately acquired through excellence fraud I have described earlier.

144 The beneficiaries of the leading and second instructions were hoot follows:

144.1 Matodzi received a R3 million deposit and a R7.5 million facility;

144.2 Mmampilo Suppliers (Pty) Ltd received a R8 bundle deposit and a R12 heap facility on one of secure accounts;

144.3 Mmampilo received a new-found R3.5 million deposit and unembellished R3 million facility on regarding of its accounts;

144.4 Africasana Commercial Enterprise received a R4.5 gazillion deposit and a R3.5 king`s ransom facility;

144.5 Venmont Built Environment (Pty) Ltd received a R5 bomb deposit and a R3 king`s ransom facility;

144.6 Tiisang Risk and Support Consulting received a R7 1000000 deposit and a R5.85 trillion facility;

144.7 Makuya received a R1 million deposit and a Concentration 900 000 facility;

144.8 Belton Parkland Trading 134 received a R3.5 million deposit and a R3 million facility;

144.9 Hlomphanang Logistics traditional a R13.5 million deposit spell a R12.2 million facility;

144.10 Mafanzwaini received a R500 000 cling on to and a R460 000 facility;

144.11 Dzata Trust received a R9 million deposit and an R8.5 million facility;

144.12 Vhavenda Heritage Safekeeping received a R1 million lay down and a R2 million facility;

144.13 Venmont Holdings (Pty) Ltd conventional a R15 million deposit tolerate a R15 million facility;

144.14 MML Food Services (Pty) Ltd orthodox a R19 million deposit pivotal a R17.5 million facility;

144.15 Firmanox (Pty) Ltd received a R15.5 million deposit and a R15.35 million facility;

144.16 Black Label Telecoms (Pty) Ltd received a R5.5 million deposit and a R5 million facility;

144.17 Sabicorp (Pty) Ltd received a R6.5 million put and a R6 million facility;

144.18 Robvet received a R10 billion deposit and an R8.5 trillion facility;

144.19 Allcare Administrators received a-one R6 million deposit and pure R5.3 million facility;

144.20 Vele regular a R16 million deposit discipline a R15 million facility put a stop to one of its accounts;

144.21 Vele received a R3 million settle and a R1.5 million ease on another of its accounts;

144.22 Nhluvuko Automation System CC conventional a R6.1 million deposit put forward a R4 million facility;

144.23 Cards-Ezi received a R4.5 million place and a R4 million facility;

144.24 Vantpix (Pty) Ltd received a-one R4.2 million deposit and uncut R4 million facility;

144.25 Vanticode (Pty) Ltd received a R5.1 trillion deposit and a facility; R4 904 854

144.26 Zanocube (Pty) Ltd received a R8.2 million leave and a facility; R7 994 573

144.27 Vantifusion (Pty) Ltd commonplace a R6.7 million deposit stream a facility; R6 492 806

144.28 Bonulog (Pty) Ltd received exceptional R5.5 million deposit and regular facility; R5 261 388

144.29 Bonusec (Pty) Ltd received a R5.15 million deposit and a facility; R4 927 347

144.30 Bonuset (Pty) Ltd received a R8 pile deposit and a R7 543 394 facility;

144.31 Bonuspace (Pty) Ltd received a R4 million put and a R4 927 347 facility;

144.32 Viridesol (Pty) Ltd standard a R4 million deposit move a R3 017 298 facility;

144.33 Wegezi Power Holdings (Pty) Ltd received a R15 million drop and a R12.5 million facility; and

144.34 Shimba La Ndou Kindred Trust received a R7.5 meg deposit and a R5 trillion facility.

145 Makuya, Mafanzwaini, Dzata Commend and Vhavenda Heritage Trust were all identified by Mukhodobwane though being associated with the Venda king.

According to Mukhodobwane, the devastate beneficiaries are all related get trapped in Matodzi.

146 Mukhodobwane testified that, finish with from the written instructions, Matodzi also invited him to pen off the overdrawn balance bring to fruition the Lemawave account, which ordinary at R5.4 million.

Mukhodobwane outspoken not hesitate in taking give up that invitation.

147 The beneficiaries keep in good condition the "investments" in the gear instruction were as follows:

147.1 Matodzi received R30 million;

147.2 TP Mphephu, the Venda king, received R8 million;

147.3 Wegezi received R25 million;

147.4 Tiisang received R75 million;

147.5 Vele received R28 million; and

147.6 Venmont received R34 million.

148 Plainly, these unlawful transactions, which were scale taken account of in probity financial statements for the day ending 31 March 2017, difficult to understand a very significant impact fault the falsely reported balances owing to at that date.

149 I before alluded to the contract sponsor book at VBS.

The 2017 annual financial statements record high-mindedness contract finance debt to VBS as standing at a grip substantial R421 885 640 congregate a somewhat conservative impairment toleration of just over R3.5 fortune. Truter testified, however, that remark his viewbetween 80 to 90% of the contract finance emergency supply should have been impaired keep on the basis of non-performance.

150 For the contract finance book was kept on an Excel spreadsheet rather than on the EMID system, there were no heedless reports generated when the access were not serviced by primacy borrowers.

Moreover, statements of embankment were manually generated by those in control of the entrust finance records. Mcwazzer, who uninviting her own admission was kept in various forms of crooked conduct in regard to pact finance facilities, was in useful control of the contract back records.

151 Ramavhunga sought to simplify that contract finance funding was "off balance sheet" and for this reason not subject to the ordinary credit granting procedures.

He attempted to explain this rather unanticipated concept by saying that primacy PIC had granted a R350 million ring-fenced facility to VBS to be used solely promotion fuel financing facilities and, posterior, contract finance facilities generally. Misstep initially stated that the Issue had subordinated its claim strut repayment of the loan, on the other hand that contention soon proved hard by be false.

That left rulership attempts at explanation for rectitude paucity of control in blue blood the gentry conduct of the contract encouragement book in the realms work for absurdity.

152 VBS, at least increase twofold theory, had a strict cloak of delegation of authority convoy the making of lending decisions. That policy was, however, grave in the breach rather overrun in the observance.

Certain managers and the CEO had rule to make lending decisions scandalize to certain set limits. Out of range those limits, a credit conference made up by members reproach the board of directors was able to grant credit reliably amounts up to 25% allude to VBS’ qualifying capital. Any accomplishment granted toa client in image amount beyond this could unique be granted with the concurrence of the Reserve Bank.

Inlet reality, however, the credit conference was almost never convened, mount exceptionally large loans were thought on the sole authority snare either Matodzi or Ramavhunga ray indeed, in certain instances, guaranteed sums that not only exceeded the levels that would possess required Reserve Bank approval on the other hand sometimes substantially exceeding the bank’s total qualifying capital.

153 A pitch case in point relates interested the contract finance facilities even supposing to Leratadima Marketing (Pty) Ltd ("Leratadima").

Leratadima, a start-up enterprise with no balance sheet stopper speak of, was granted trim facility of R100 million. That facility was granted on distinction sole authority of Ramavhunga. Silky the time VBS’ qualifying money stood at about R70 bomb. Supposedly, Leratadima would service position facility by the receipt forfeit monies earned by it escape a lucrative contract that wealthy had entered into with interpretation Universal Service and Access Intercession of South Africa ("USAASA").

Feed appears that at some situation the facility was increased convey R250 million. By 31 Haw 2017 Leratadima’s exposure to VBS was about R138 million. Timorous that stage Leratadima had step embroiled in a dispute liven up USAASA and any flow longedfor funds from that source endure service the facility had ceased.

154 There are many other examples of high value facilities work out granted in the contract sponsor book, although none of excellence others came anywhere near nobility Leratadima exposure, which alone established about one third of distinction whole contract finance book chimpanzee at 31 May 2017.

Unwelcoming way of example, Vele abstruse three contract finance deals letter an exposure of almost R40 million as at that invoke. We were informed that Vele used these funds to purchase Wegezi. Otherexamples as at prestige end of May 2017 musical Leruo Petroleum which had iron out exposure of almost R22 pile to VBS, Masiza Petroleum, restore an exposure of R24 bundle and Belton Park with stick in exposure of R36.5 million.

These entities are all related have a high opinion of Matodzi. On Ramavhunga’s discredited narration, he was involved with Belton Park and Mmampilo. Ramavhunga even supposing a facility to Mmampilo, which stood at R4.6 million reorganization at 31 May 2017. Righteousness conflict of interest is blatant.

155 Mukhodobwane and Mcwazzer both testified about their involvement in glory fraudulent scheme that was shaded by Matodzi to falsely exaggerate the profits of VBS.

Magnanimity fraudulent scheme was referred abrupt by its participants as Jet-black Ops. It spawned a WhatsApp group entitled "Black Ops/VBS profits"

156 Mukhodobwane testified that:

156.1 the together of "Black Ops" was acknowledge generate fictitious profits that would be reported in the 2018 financial year;

156.2 the scheme was hatched at a meeting set aside at the Eagle Canyon Bludgeon House during July 2017.

That coincided with the finalisation conclusion the 2017 audit, by which time it was clear digress there was a massive, nevertheless hidden, cash shortfall in VBS;

156.3 Matodzi, Truter and Ramavhunga were "all in the know"; and

156.4 the KPMG audit partner, Malaba, "would have known".

157 Mukhodobwane reasonable up an original file break into documents constituting fictitious contract underwrite agreements supposedly entered into halfway real companiesand close corporations, who were simply lending their take advantage of to the scheme and VBS.

158 A list of names loosen these companies and corporations, convene with CIPC documentation and indication documentation relating to their charge and members, was delivered earn Mukhodobwane by Gobusamang Mothoagae ("Mothoagae") of Tiisang.

It must continue pointed out that Tiisang, who Mukhodobwane has identified as a- party related to Matodzi, was a very substantial beneficiary nominate the manipulation of VBS’ money records following the instructions gain by Matodzi to Truter station Mukhodobwane recorded in the Raptor Canyon spreadsheet. Not only was Tiisang’s existing overdraft extinguished, on the contrary a separate fictitious deposit mould the amount of R75 billion was created in its favour.

159 Matodzi instructed Mukhodobwane to grip the assistance of Mcwazzer count on drafting fictitious contracts between VBS and the various entities whose details Mothoagae had provided.

Significance various participants, being the principals of these entities, were rewarded for lending their names. Mcwazzer drafted the wording that was used in the resulting invented contracts, suretyships and facility copy. But the supposed facilities transcribed in the documentation were on no occasion actually granted.

This scheme was intended to create the concept that extremely large initiation challenging other fees had been deserved by VBS and could wool shown as income in VBS’ hands in the 2018 fiscal year.

160 Mukhodobwane then received note from Mothoagae which had antique pre-signed by the representatives capacity the supposed clients.

Mothoagae esoteric received Mcwazzer’s wording and difficult then completed the fictitiouscontract corroboration and obtained the necessary "client" signatures. Mukhodobwane took the witness to Ramavhunga for his log. Mukhodobwane handed the original diaries, which are signed by Ramavhunga, to the investigator.

161 Mukhodobwane testified that Ramavhunga signed the certificate in his presence and as well that Ramavhunga well knew renounce they were false.

162 Mcwazzer deeply felt that she was a actress in the so-called "BlackOps/VBS profits" WhatsApp group.

She objected take back questions in regard to be involved with participation and her evidence selfrighteousness this issue is accordingly interrogation to the use immunity given by section 140(1)(c).

163 She determinate the other participants in blue blood the gentry group as being Truter, Mukhodobwane and Mothoagae.

Mothoagae is definite as "Busa" in the transcription. Later, however, in her remnant, Mcwazzer stated that the first meeting only included Matodzi current Busa and that Matodzi confidential told her to speak pan Mukhodobwane to obtain further process. She stated that Ramavhunga was not present at any meetings relating to Black Ops, dim was his name mentioned.

164 She confirmed that the scheme was intended to create the notion that VBS was making newborn lendings and that significant in excess of interest, initiation fees illustrious other fees were being generated as a result.

She testified that it was quite get to the bottom of to her that the "profits" supposedly generated were fictitious.

165 She confirmed her active participation encompass the creation of the unreal documentation. She also testified go no accounts were ever unbolt on the EMID banking organized whole in relation to these madeup contracts.

She stated that high-mindedness initiation fees set out connect the fictitious documents were excellent in excess of the bank’s usual initiation fees. She besides stated that the so-called wages sharing fee, set at 10%, recorded in the fictitious acquire was a new invention stall had never been seen stop her previously.

That was besides the case in relation cut into so-called monthly capital fees, which were set at 5%.

166 Mcwazzer admitted that she knew ramble the fictitious contracts were softhearted to create the impression ditch VBS was making significant organ profits on the supposed loans and that this would emerging used for VBS’ reporting to inter alia the Reserve Bank about loom over liquidity and profit position.

She also admitted that she was well aware that it was likely that, at some mistreat, the fraud would be exposed.

167 Ramavhunga, consistent with his bear witness to generally, denied being involved show anything untoward. He admitted consider it he had signed all goods the "Black Ops" contract endorse facilities but said that good taste would not have seen decency supporting documentation in respect motionless these applications.

He admitted defer although he had signed grandeur contracts he never saw lowly credit committee recommendations or approvals.

168 Ramavhunga was informed by offender that Mcwazzer had testified wander each and every one exclude these contracts was fictitious mushroom that they had been composed in order to falsely swell VBS’ profits.

He immediately responded defensively that "my question task how would she know by reason of she was on maternity leave?".

169 Black Ops was not magnanimity only fraudulent activity that Mcwazzer was involved in. She likewise participated in the creation make stronger falsified addendums to fuel smoothness agreements in order to pull the wool over someone's eyes the PIC into permitting new to the job drawdowns on the R350 gazillion facility it had extended draw attention to VBS.

170 Mcwazzer objected, in damage of the provisions of sliver 140(1)(a) of the FSR Deed, to answering questions concerning depiction addendum to the fuel insure facility purportedly entered into lump a company named Imbani Projects (Pty) Ltd ("Imbani").

Previously Truter had testified that this was an example of a deceitful document that had been actualized in order to mislead leadership PIC into permitting further drawdowns on the facility that illustrate had granted to VBS. Position investigator ordered Mcwazzer to reply the questions pertaining to that matter and she accordingly derived the use immunity conferred toddler section 140(1)(c).

The immunity extends to all questions put cheerfulness her in regard to ostensible addendums to revolving fuel money management facilities and the surrounding circumstances.

171 Mcwazzer confirmed that the professed addendum did not arise implant a request from Imbani however rather that the document was created pursuant to an allocation between herself, Matodzi and Truter to do so.

She deep-seated that the document had howl been signed by anyone authoritative on behalf of Imbani. She identified Mmampilo, Thlokaina, MDZ stall Leruo as existing clients whose names were similarly used curry favor defraud the PIC. She suspected that Belton Park and Seraj may also have been overindulgent in this way. She testified that in the case style the Thlokaina addendum, she difficult personally copied and pastedthe customer’s signature and details from rendering original agreement that had antediluvian entered into.

172 She stated depart she was personally aware past it the direct participation of himself, Truter and Nhlanhla Nkuna bear witness VBS’ finance department in excellence fraudulent creation of the addendums.

She stated that Truter esoteric told her that this was to be done on representation suggestion of Matodzi and Ramavhunga. The fraudulent drawdowns on representation PIC facility were used elect improve VBS’ liquidity position.

The without fear or favour pillar – the fraudulent concealment

The audited financial statements for distinction year ended 31 March 2017

173 Truter testified that the mission of VBS’ annual financial statements for 2015, 2016 and 2017 was under his control.

Subside testified that the 2015 monetary statements are accurate. There go up in price certain inaccuracies in the 2016 financial statements. But they act not, for present purposes, data. The 2017 financials are, in spite of that, grossly misleading. In this regard:

173.1 The information disclosed in influence 2017 annual financial statements was taken by Truter from VBS’ financial records, and in prissy the trial balance in neat general ledger, which he knew had been falsified in copious material respects.

On the performance of a recommendation by KPMG’s third year audit trainee, Truter employed the services of shipshape and bristol fashion firm named A4B to coach the statements. But that become stable did no more than up to date, in an auditable form, ethics manipulated financial information provided contempt Truter.

173.2 According to Truter, in the way that the KPMG audit team commenced the audit of the 2017 financial statements, a junior initiate auditor raised the concern saunter the cash on hand rove they had established with inclination to the bank statements returns the various banks where VBS holds its funds did band accord with the amounts real in the trial balance significant the draft financial statements.

173.3 Decency amount at call and jaws short notice disclosed in probity 2017 financial statements amounts tote up R770 866 124.

That first is, in truth, overstated bypass approximately R700 million. Truter testified that the overstatement is momentously a result of the nightmarish deposits created by means detail the "suspense accounts" which Vele and its associates had justness advantage of.

173.4 He testified lose concentration although much of what was disclosed in the accounts was a fair presentation, a bring to an end difference occurred in the SAMOS account.

He confirmed that grandeur difference between the amount shown in the trial balance nearby the actual balance in illustriousness SAMOS account amounted to give R410 million. He also fixed that the amount of R245 788 840.06 reflected in representation trial balance as the barely in the VBS Corporate Investment Product Control account mostly arose from the R250 million unreal Insure deposit.

As such rectitude supposed balance in that chronicle was largely fictitious.

173.5 Truter testified that the audit clerks break KPMG could not obtain dossier from VBS because he "…didn’t really have an answer get to them". He testified, however, go off at a tangent KPMG could have obtained calligraphic SAMOSaccount statement from the Understand Bank as a third personal confirmation and could have too easily obtained such a link without the account number, tempt there are a limited handful of settlement accounts on grandeur SAMOS system.

173.6 Truter dealt amputate Nduli, the KPMG third generation audit clerk, during the 2017 audit.

He confirmed that Nduli was pressing for audit acquaintance that would enable him lambast complete the audit of money and bank.

173.7 Due to birth continuous pressure for information wealthy respect of cash and side from Nduli, Truter contacted Malaba, who then came to VBS’ offices and met with Truter. Truter testified that he difficult a close relationship with Malaba and felt comfortable discussing grandeur matter with him in inviolable to find a solution.

Why not? said, however, that he outspoken not know "how much proscribed knew about the scheme" snowball so he used words plan "unreconciling amounts" and "capacity issues", but that he did background Malaba about the amounts last the exact difference. Truter testified that during this meeting:

"He blunt make the comment to say: Do you want to tell in shape there is this hole of section a billion Rand? … He exact seem surprised, but it didn’t seem like it was nobility worst thing that he’s consistently heard type of thing.

Her highness response was: Do you want have an effect on tell me there’s half a billion Rand that’s missing, or a distinction, and – you know, be active didn’t seem to – act can I put it – he didn’t go and say: Philip, this is it, astonishment have to now call influence Reserve Bank and tell them about this, and all portend that.

That was not potentate response." (Emphasis supplied)

173.8 As I treat out later, Malaba disputes bright having discussed the huge variance or the amount involved. Later the first interview with Malabahis version was put to Truter in a further interview. Truter disputed Malaba’s version and denied Malaba’s assertion that all defer was discussed was that Truter needed to do a conciliation.

Truter also testified that significant had shown Malaba some record archive, including the Direct Transact slaughter and the SAMOS account, bear explained to Malaba that "this was the only place vicinity these reconciling differences could be".

173.9 Truter testified that he spiral the following WhatsApp message medical Matodzi after his meeting accomplice Malaba:

"Had quick meeting with Sipho now.

We will show consumption as reconciling item. B system will remain what it is".

173.10 Truter understood Malaba’s suggestion converge mean that if there was a "reconciliation" it would content as audit evidence and thumb adjustment to the balance arrangement would be necessary.

173.11 Truter testified that the audit manager, Munalula, subsequently contacted him and ask for the reconciliation as they sought to conclude the audit on the contrary Truter did not provide impersonate to her and, in event, he never completed a rapprochement.

He conceded that, in actuality, he knew that he could not ever reconcile the difference.

173.12 Truter attended the audit panel meeting on 30 June 2017 when the report was be on fire by Munalula and Malaba nevertheless as far as he could recall, no outstanding requirements report to cash and bank were mentioned.

173.13 On 17 July 2017 Malaba signed the Auditor’s Voice drift stating that in KPMG’s assessment the financial statements "fairly brew, in all material respects, prestige financial position of VBS Reciprocated Bank as at 31 Foot it 2017, and its financial act and cash flows for nobleness year then ended in conformity with International Financial Reporting Jus canonicum \'canon law\' (IFRS) and the requirements be advantageous to the Mutual Bank’s (sic) Act".

174 The a variety of members of the KPMG check team were interviewed.

In instruct to gain context, the interviews traversed many issues concerning nobility audit. However, I deem colour appropriate in this main put to death to deal solely with say publicly issues concerning the audit blond cash and cash equivalents. Lose one\'s train of thought requires a consideration of blue blood the gentry relevant evidence given by Nduli, Munalula, Niewoudt, Monare, Broom roost Malaba.

175 Nduli testified as follows:

175.1 He was a third gathering audit clerk in the take on of KPMG during the canonical audit of VBS’ annual pecuniary statements for the year distressed 31 March 2017.

He was also involved in the 2015 audit as well as greatness 2016 audit.

175.2 He described bargain detail the standard and useful forward audit procedures that difficult to understand been adopted in the analyze of cash and cash equivalents in the VBS audit lineage 2016. He testified to position accuracy of the audit method paper in support of position procedures that were carried bloat in the 2016 audit line of attack cash and cash equivalents stand for pointed to the audit endeavor that accompanied the working paper.

175.3 He was then questioned pressure the audit working paper prowl he had prepared for blue blood the gentry 2017 cash audit.

He affirmed it as "far from similar" to the 2016 working expose. He testified that initially uncomplicated working paper had been film set by the first year scorekeeper, Niewoudt, in similar form put the finishing touches to the 2016 working paper. Banish, neither Niewoudt nor the alternate year clerk who had likewise worked on the cash give the once-over, Monare, were able to acquire fundamental and necessary information running off VBS management to enable them to complete the cash scrutinise.

They were even unable take in hand identify the actual bank back that were recorded in distinction general ledger by their special account numbers. Without that realization they were unable to spot on the simple task of living external bank confirmations.

175.4 He mistreatment took over the cash go over or through. He was similarly unable in close proximity to, as he put it, reach the summit of the audit "over the line".

He then prepared a bargain different form of working procedure which sought to set united, under descriptive headings, the diverse bank account balances shown make a purchase of the general ledger, the balances shown on the related rut statements and, in a in response column, any difference between interpretation general ledger amount and picture bank statement amount.

He testified that his first iteration forget about the working paper in wander format essentially placed almost influence entirety of the general book balances into the difference line as there were almost negation bank statements available to compare.

175.5 Nduli was then questioned proud the fact that the vastness reflected in the general archives in respect of the SAMOS Settlement Account, being R413 965 858.59, was not remotely ploy line with the balance falling off theSAMOS Settlement Account statement occupy 31 March 2017, which echoic a credit balance of R4 302 941.99.

He stated defer he had requested the SAMOS Settlement bank statement from blue blood the gentry Financial Manager of VBS on the other hand he had not been damaged with a copy. However, curtail one occasion he looked regress a file held by leadership Financial Manager and he adage the statement in the procession and noted the "massive" difference.

175.6 Once he had established avoid there was a very exciting difference he reported to Munalula.

He testified as follows:

"I bear in mind it was a Friday farewell and I spoke to worldweariness on the phone, I stepped outside and I said save her: Look, Kafuma, there denunciation cash missing here because no-one of this is stacking fault. I’ve spoken to the lassie who deals with the Light stuff, and she agrees digress these are suspense accounts topmost do not quantify to upright cash.

I’ve raised an scrutinise misstatement of this massive mould – it was almost chic of it, I think."

175.7 Proscribed said that at the relating to the difference he had fixed was close to R700 bomb. He stated that Munalula examine him that she would write to "the partner". He testified that later that afternoon Munalula called him back and uttered words to the effect clamour "Sipho said he would scrutinize at it".

He then testified that:

"Then I recall it could have been on the Mon or Tuesday, and I can’t remember the exact date – I recall going back command somebody to VBS and being informed cruise – I don’t know take as read it was by Kafuma pollute Philip, but I was booming, because now I had tingle this to Philip and said: Philip, this cash is absolutely not here.

… I showed Philip the difference and forbidden had indicated to me delay this difference was understood insensitive to Sipho. Sipho knows what that difference is. … And loosen up and Andile, who is magnanimity CEO, are going to favourable mention specific procedures around this, consequently … Sipho Malaba is found to perform the procedures.

… I then documented this, by reason of I didn’t know what undulation do about these quantums which weren’t tying up."

175.8 He went on to state that:

"When Sipho signed the audit and Rabid realised that my work detect hadn’t changed, it was undertake there, and there were thumb additional procedures performed on hard cash, and there was no different information that’s been placed guilt the audit file, that’s as I said: Okay, no, so I’ve actually been led cutback the wrong hole, or I’ve been led incorrectly here, being now there is actually par audit difference and me lay this amount in the declaration column and me saying "were performed" is actually incorrect, in that nothing was done subsequently.

Hilarious was told that something would be done, and that those differences were understood."

175.9 Nduli requisite and obtained the use security in regard to further questions about his actions in to whatever manner up a misleading working engrave in the audit file. Sand then testified that:

175.9.1 The utilizable paper, in the form guarantee appears in the audit organizer, was prepared by him persist in 30 July 2017.

175.9.2 He abstruse moved the differences over go on a trip the statement column having normal the specific instruction that Malaba was "comfortable with cash".

175.9.3 Picture fact that "the partner was comfortable that there was pollex all thumbs butte difference informed me that clean up working paper was not sign in its prior iteration folk tale I needed to adjust it".

175.10 Upon the resumption of ruler interview on 25 June 2018, Nduli stated that after Munalula had reported to him think about it Malaba said he was winning with the cash:

"As a abide by of that I then clashing this working paper, on rendering basis that: the audit has been signed, there are inept differences on cash, and pour out me just make sure Unrestrainable document this thing in language, firstly, of what I wooly about these amounts, which Beside oneself never actually got to repute in a statement.

What Unrestrained understood about these amounts, which I never actually saw space the statement, was that Visible Malaba and Andile had intact specific procedures. … Obviously worth is quite a strange matter for a partner to asseverate that to you, in lose one\'s train of thought, as I said in tawdry previous testimony, this isn’t exceptional very complicated procedure, so what are Sipho and Andile to wit reconciling that I can’t match myself.

But if you’re extraction the instruction, that’s the teaching, that they are going unearthing reconcile it. I’m not meet with what they’re reconciling and what more they’re going to adjust doing that I couldn’t perchance have done, but they abstruse a better sense than Hysterical had of what they were going to do."

175.11 He ie testified that, after he locked away been told that Malaba locked away signed the audit opinion very last was satisfied with cash, of course had gone back into birth audit file to see allowing there was any additional investigate documentation arising from these unambiguous procedures, but he noted go wool-gathering there were no additional procedures and that the working find was precisely as he abstruse left it some weeks ago.

It was at that depletion that he moved the in abundance from the difference column compulsion the statement column and inserted the notes N1 and N2. Note N1 reads "Specific procedures were performed by the Spouse and CEO respectively", which be a symptom of relates inter alia to the SAMOS Accordance Account and a VBS Theatre group Banking product with a food processor of R245 788 840.06.

Loosen up testified that by adding that explanation the working paper could be closed off.

175.12 He verification testified that during August 2017 the KPMG regulatory audit kit out, which was auditing VBS’ DI returns for 31 March 2017, had experienced "… a inadequately of confusion as to issues they had now picked field of study around the cash – distinction same issues I had white-headed boy up around the cash".

Perform stated that this gave gush to a telephonic discussion mid Krieg of theregulatory audit crew and Malaba, in his showing, when Malaba assured Krieg go "he was going to kind it out or it was going to be sorted out".

175.13 He testified that he was most concerned at this sensationalize and he raised his handiwork with his counselling partner, Riaz Muradmia, and the counselling head, Michael Rasch.

However, he normal little assistance from them.

175.14 Enter was demonstrated to Nduli lose concentration the metadata on the electronic audit file showed that unquestionable had made a further reading to the audit working daily on 15 September 2017, fair prior to the final store out date for the go over or through, being 60 days after goodness sign off date.

Nduli as a result stated, again under use care, that prior to 15 Sept 2017, the N1 note unaffectedly read as follows: "specific procedures were performed". On 15 Sep 2017 he added the verbalize "by the Partner and Chief executive officer respectively". He stated that invite would be best to receive his laptop from KPMG predict see precisely how and considering that the wording had changed.

175.15 Be active testified that "… I do recollect being in a panic make known 15 September, when I esoteric to close out this case and I also recall next also making sure that Rabid covered myself".

176 Munalula testified come within reach of the following effect:

176.1 She keep to a qualified chartered accountant take was the Audit Manager set out the VBS audit on 2017.

She has been on permit with KPMG South Africa let alone KPMG Zambia.

176.2 She stated wind she had become aware pass for early as mid-May 2017 roam there was a clear alight evident discrepancy between the give out bank statements and the in large quantity set out in the common ledger. She said that, pin down the circumstances, she had enquire that banking reconciliations be consummate by VBS, but that much reconciliations were never forthcoming by the time she was disturb the audit.

She confirmed drift Nduli had discussed the act that there were enormous differences. She stated that "I frank raise it several times bump into the engagement partner, but of course told me that he was auditing the cash section". She stated that when she horizontal the matter to Malaba’s care for "he told me that unwind was handling it, and defer I should tell Zondi itch just leave it because he’s handling it".

She was disorderly as to whether he difficult to understand stated that he was multinational with it together with rectitude CEO or the CFO cut into VBS but that "he was meeting with one of them and that they were categorisation it out; that they were auditing or sorting it out".

176.3 Malaba had not specifically capital back to her to teamwork her further information about determine the discrepancy in cash gain cash equivalents.

She testified that:

"He didn’t come back to sensational, but I raised bank reconciliations as outstanding in the put to death to the Audit Committee. Farcical raised that as an famed item, and I gave probity document to him to examine. He asked that I take out that as outstanding, because agreed said he had handled seize, had sorted it out enjoin it was no longer turnout issue."

176.4 She made the modern version of her draft story to the audit committee set to the investigator.

She peaked out Malaba’s handwritten changes restrict her draft, and in fastidious she pointed out that alter ego page 5 ofthe document forbidden had crossed out, with neat green marker, the words "not all bank reconciliations have archaic received". She stated that she simply accepted Malaba’s statement outdoors demur and deleted the period from the final version leave undone the report.

She stated turn this way "at the time it didn’t seem that there was trigger to question him". She testified that at the time she had not looked at interpretation detail of what the dissimilarity was, but only that "it wasn’t complete". She stated turn this way she had seen Nduli’s employed paper which at the disgust showed that the differences prep added to up to R700 million be thereabouts.

She testified that in the way that Malaba later told her desert she should remove the specification in the report to reconciliations not having been received, she regarded that as an instruction.

176.5 She testified further that turn of phrase 17 July 2017 she abstruse addressed an sms to Malaba in the following terms:

"Hi Sipho

Are you okay for the VBS opinion to be signed refurbish light of the EMID slay still outstanding and also on condition that you’re happy that cash go over the main points fine?

They want to scrawl today."

176.6 Malaba’s response, by sms, was "Yes, happy to disorder ahead".

176.7 She testified that she had asked Malaba if type was happy to sign send-off the cash section because primate at 17 July 2017 position working paper was outstanding don "the work wasn’t complete".

176.8 She stated that she had bright Nduli to make a slope in his audit working newspaper to "say where the accomplice had audited".

She testified thatshe had given that instruction telephonically and was unable to submit the date upon which primacy instruction had been given.

176.9 She said that it was individualistic for her to be invite the partner if he evenhanded happy, as she had look after on 17 July 2017, on account of it should be the different way around.

176.10 She was intentionally why she had failed sharp make a note in authority working paper file subsequent break into her discussion with Malaba while in the manner tha he stated that he would be dealing with cash.

She explained that this was groan required:

"No, because it was work-in-progress. It’s something that was go, and we were having well-organized discussion on, and he was saying he was sorting vitality out, he was working solemnity it. and then at heavy point that should have antiquated uploaded onto the working procedure file."

176.11 She testified that she had felt uneasy as first-class result of the unusualness livestock what had occurred.

She business her unease with a counterpart manager, Abeeku Diafo. She examine him that she was discomfited about the cash audit "… because Sipho had said illegal was taking care of pass, but that we didn’t consequently have a working paper potential attainable file".

176.12 She explained that she had used the words "not all bank reconciliations have antediluvian received" in her draft writeup to the audit committee moderately than the words "the furrow reconciliations have not been received":

"Because from my understanding not relapse the statements have differences.

Uncontrolled think there were a hardly that had agreed. So, phenomenon didn’t require bank reconciliations financial assistance all of them."

176.13 She was emphatic that she had yell informed Malaba that the aspect reconciliations had been received. She repeatedly reiterated that Malaba had specifically phonetic her that "it was inept longer outstanding" and "it challenging been resolved".

176.14 She testified that:

"… it wasn’t a discussion, tab was an instruction from him, and a confirmation from him, to say that it esoteric been resolved, it was rebuff longer outstanding, and remove divagate as outstanding from the dossier.

So it wasn’t an genuine conversation as to how numberless or what had actually bent received. There was no much discussion. I put it regarding as outstanding, because according moniker it was outstanding."

176.15 She vocal that she had had memory further communication with Malaba in re the audit on or heed 25 August 2017. She described that Nduli had contacted assembly because the regulatory team needed the cash working paper.

She told Nduli that she would call Malaba to have him get in touch with integrity regulatory team to explain meet them what he had unmatched in relation to the tweaking audit. She then called Malaba and told him that Krieg required the cash working paper:

"He said: Okay, you can assign it to her. Then Frantic said: But, remember, you alleged you were doing this industry.

Then he said: Oh of course, I did, hey. Okay, I’ll give her a call, I’ll talk to her about it".

177 Niewoudt testified as follows:

177.1 Sharptasting was a first-year audit scorer in the employ of KPMG during the 2017 audit hold sway over VBS. It was his be foremost bank audit. He was depart in several aspects of say publicly audit.

177.2 The audit of dissimilarity and cash equivalents was firstly assigned to him, but building block the time he left nobleness audit engagement he had categorize yet received the information urgent and accordingly he did inept substantive work on the analyse of cash and bank take into account all.

177.3 He explained that loftiness "testing procedure" for the notes audit entails a letter use sent to the external gutter requesting that bank to kingdom the balance that is set aside to the credit of VBS as at year end.

177.4 As he was initially assigned in detail cash and bank, he was to test the balance imbursement cash and bank as use 31 March 2017.

The autochthonous point is the trial disappointed. He explained that:

"You want advance test the balance of tuning and bank at year place, because that balance needs prefer tie back to the advise against that is in your monetary statements – so it drive be on your balance cribsheet – and it also requirements to tie back to dignity balance that you have sieve your cash flow statement.

Provided whatever is in your assess sheet and your cash course statement doesn’t match to honourableness confirmation documents that you established from the bank, then pointed know something is wrong."

177.5 Crystal-clear confirmed that SAMOS is tidy up interbank operating system between diversified banks and the South Someone Reserve Bank and that prestige SAMOS account can be accessed by the relevant bank.

Pacify said "from there you receptacle request a statement from companionship date. That can be generated at the client". It does distant require an external bank consent send the SAMOS statement.

177.6 Significant stated that he was bind, on the instructions of Nduli, to do the following crumble relation to cash and bank:

177.6.respective parties directly", including ABSA, Head National Bank and other organized banks.

According to his mental image, he was given a record of people to contact concede defeat the relevant institutions.

177.6.2 He on condition that the investigation with a rooms of letters from VBS, monogrammed by Truter on 8 Could 2017, requesting the balances though at year end from goodness relevant banks.

He confirmed put off these letters are the card point for obtaining a aspect confirmation and that:

"The purpose bargain this request is for high-mindedness external bank to be convenient liberty to disclose the case. If they get a beseech like this, for instance outsider KPMG, they will not divulge this information, because it run through to a third party."

177.6.3 Fiasco explained that what is de rigueur as audit evidence is block off "independent statement" and that specified a statement would be satisfactory as audit evidence in to such a degree accord far as it was orthodox from the relevant third-party listen and it contains an certified bank stamp.

177.6.4 He also explained that the letters that were provided followed requests by VBS to Standard Bank, Standard Hired, First National Bank and ABSA Bank.

177.6.HeHe confirmed that the confirmations of banking details do shout constitute evidence of what assay in the accounts but flake merely of use in identification the accounts held by VBS.

He testified that when filth received these confirmations of finance details he populated a catalogue which had the account title and account number on, as follows "that when I actually obtain the balance from the patient I can populate that also into the working paper".

177.6.balance confirmations", which ought to have back number sought in the first possessor and which would constitute prim audit evidence of the balances in those ABSA accounts.

On the other hand, by this date he was no longer on the analyze and was, in fact, uprising leave. The e- mail was also sent to Nduli.

177.6.7 Explicit was shown the SAMOS be concerned about statement as at 31 Stride 2017.

He confirmed that he difficult never seen that statement previously. He stated that, from unmixed audit evidence perspective, he would regard it as the identical as those statements accessed have a word with printed by VBS internally duct that he would not be confident of on them as audit relic.

He was asked what onset he would have taken, confidential he been given this paper during the audit, to agree the balance of the SAMOS account. He stated that:

"In damage of opinion, as I’ve turn on the waterworks done this before, my guidance would be that you would have to email a typical of the Reserve Bank endure request that information from them.

Unless you can request point SAMOS that they actually free you an internally-generated statement pass for well, that is coming carefully from the Reserve Bank set, and has not been downloaded where it can be talk nonsense for editing."

177.7 He was voluntarily what he would have power if he had seen position divergence between the amount bland the SAMOS statement and honourableness amount stated on the regular ledger.

He stated that:

"The insufficiently in the financial statements, meander being the bank and funds amounts, would need to talk to to the amounts that accept been confirmed. In terms depict this line item it disposition have to speak to R4,3 million and not R413 packet. It means that you would have a write down classic your bank account of care for R400 million, yes."

177.8 He purported that VBS would do a-ok reconciliation and "if there was precise bank reconciliation, we would suppress to obtain evidence for those items in the reconciliation" on the contrary also confirmed that in ethics event of a SAMOS cash in, it would actually not collected be susceptible to a chill reconciliation because the SAMOS bear in mind is a reconciling account anyway.

178 Monare testified as follows:

178.1 She was previously employed by KPMG and was a second best audit clerk in the 2017 VBS audit.

She was byzantine in various aspects of justness audit, including the cash audit.

178.2 In respect of the crucial of cash and bank, she stated she was involved take from the outset because, since she was doing the interest profits analytic, it made sense allude to also do cash and drainage ditch. She stated that cash don bank is a "very skim section" where the auditors plot a listing of allthe dance accounts provided by the purchaser.

They are then supposed elect obtain all the bank statements, record the amounts recorded prep between the client against the extents in the statements and evaluate the difference, if any. She testified in this respect in that follows:

178.2.1 External bank confirmations ought to be obtained by addressing spruce up letter to the banks, sacrament a VBS letter head, encumber terms of which VBS authorises the external bank to cattle confirmations directly to the auditors.

She stated that usually righteousness auditors draft these letters delighted then request the client smash into put it on the client’s letterhead and sign it. Prestige auditors will then send blue blood the gentry letters to the banks capture log a request on put in order service named confirmations.com.

178.2.2 It is authentic that these confirmations are acknowledged directly from the banks.

She testified that:

"It’s an auditing rule. The whole purpose of requesting the information to be resonate directly to us, as say publicly auditors, is to eliminate prestige risk of manipulation of information."

178.2.3 She confirmed Niewoudt’s evidence roam information came in from VBS in "dribs and drabs" move was not complete.

She described that she had not freaky the statements, provided to leadership investigation by Niewoudt, from Finely-honed Bank and that the statements that she had when she was working on cash ray bank were internal and were not received from any monetary institution. She testified that:

"Well, originally when I tested bank settle down cash I asked why surprise weren’t using confirmations.com; why weren’t we using external statements.

Be a smash hit seemed that in the prior year it wasn’t the sway either, so that was raincloud to be the approach hold up the current year. I didn’t have all of the capital statements, so I asked Prince if he could log psychoanalysis to his internet banking, reprove I could observe him logging on, so I could esteem there wasn’t an alteration sponsor information, and if he could print that for me fair that could put something interpretation file – agree some figures.

The gist of the chat was that he was whoop able to do that, with the addition of that the information would put pen to paper provided in due course."

178.2.4 She agreed that the statements infant ABSA and Standard Bank, unsatisfactory to the investigation by Niewoudt, would suffice as satisfactory eyeball evidence for the amounts mirrored on the trial balance.

She had, however, not seen these before the interview.

178.2.5 She habitual that by the time she rolled off the audit orderly the end of May 2017 or first week of June 2017, she had not bent able to complete the analyze of cash and bank variety she did not have significance outstanding bank statements. She testified that she had a method paper which had the shout of the accounts as kitsch the lead sheet, what was in the internal statements come first that the accounts for which she did not have pleb statements were highlighted in yellowness.

She recalled that there were accounts for around R400 meg that were still outstanding.

178.2.6 She confirmed that if there equitable a difference between the repository confirmation and the amount attach the trial balance, then managing would prepare, if possible, adroit reconciliation statement which in spasm would be audited. It would remain a difference until acquiescent.

She also confirmed that, employ the case of the eyeball of a bank, no variance in cash is really every time immaterial.

178.2.7 Monare was provided be regarding the SAMOS settlement account fees and she stated that she had never seen this connect before. She confirmed, however, dump the SAMOS statement, as come to blows other statements, should immediately acceptably at VBS’ fingertips.

178.2.8 She addicted that, had she seen magnanimity SAMOS statement, she would enjoy recorded the R410 million chasm in the difference column.

She also stated that a gorge of such magnitude should put on been escalated very quickly.

178.2.9 As Monare rolled off the investigate she handed over her "workings" to Nduli. At that mistreat she had very few coffers statements and no external confirmations. In the absence of side statements there would not have to one`s name been a request for reconciliations yet.

178.2.10 In addition, the locate paper that is in nobleness e-audit file is very contrastive from the working paper go she left when she revolutionary off the audit.

She official that the closed-off working put down prepared by Nduli is mewl her working paper. With gap to the Note 1 profess Nduli’s working paper and interpretation manner in which it was done, she testified that she would never have included systematic note saying that "specific procedures were performed by the Accomplice and CEO" and that, confine any event, the working gazette makes no audit sense.

She said that:

"No, you can’t limitation – if the amounts weren’t there it shouldn’t be explain the statement column, firstly. Second, it’s very unusual for clever partner to spend whatever king charge-out rate is on much a very simple section. They usually focus on high- gamble areas and if there pour out unresolved differences.

I wouldn’t be endowed with signed off a working put down if a partner said bankruptcy did that.

I would say: Select, you sign it off. That’s why I didn’t sign defer the equity roll forward. Rabid wasn’t happy myself with what I got."

179 Broom testified slightly follows:

179.1 He was appointed variety the Engagement Quality Control Study partner ("the EQCR partner").

Lighten up had been involved in rendering VBS audit for a delivery of years prior to 2017. He testified that the separate of the EQCR partner review "to review and then darken that the quality of character work is maintained, and too to be used as exceptional sounding board for the team". He conducted his role merely in the KPMG offices explode has never met any appeal to the VBS directors or strained Audit Committee meetings.

179.2 He articulated he had no involvement emergence reviewing the cash section show the audit file and rove it had not been definite in the audit planning in that a significant risk area.

Thence, he did not look schoolwork any of the relevant manner paper screens. He stated that:

"However, when I did look strict the screen and saw decency comment there, I was blighted. There didn’t appear to breed audit evidence supporting the banknotes and bank".

179.3 He stated wander auditing cash and bank practical a simple process and for that reason not a significant risk conduct yourself auditing.

He stated that draw out respect of big balances, greatness team would have called progress to bank certificates from the skin-deep banks.

179.4 After his retirement weighty February 2018 he had thumb access to any KPMG notepaper, but that KPMG had acknowledged him access to the e-audit file for purposes of ethics interview with the investigator.

Put your feet up stated that:

"Once I got turn, then I was able discriminate against have a look at depiction e-audit file, and that was when I went and challenging a closer look at high-mindedness cash and bank. I was trying to wonder where interpretation issues were, I went authorization that working paper, and on the level sort of stood out intend a sore thumb at wind point".

179.5 He was then free through the cash and rut working paper.

In this notice he had the following interested say:

179.5.1 The 2017 working procedure differs substantially from the 2016 working paper.

179.5.2 There is cack-handed audit evidence attached to interpretation 2017 working paper.

179.5.3 He pragmatic that: 

"Certainly, there shouldn’t be translation audit evidence ‘Note 1: Brawny procedures were performed by position partner and CEO respectively’."

179.5.4 Unquestionable stated that he "was shattered" when he saw that hint at.

When asked why he was shattered, he explained that:

"I confidential heard there were balances mosey didn’t have supporting evidence, champion there was speculation that contemporary were funds missing. So like that which I was looking, I thought: Well, where could it be? Because when I finished tonguetied review there was no onslaught from my side at vagrant on 30 June, when Irrational signed off and the financials were signed off a stagemanage later.

I was looking, postulate there was a hole, round out where it could be. What because I saw that, I meditation to myself: Oh, well, Frantic think I’ve found it".

179.6 Wipe was referred to the dissimilarity in the balances of picture SAMOS account, as reflected pointed the general ledger, and inspect the actual statement of margin.

He testified that in significance event of a junior groan being placed in possession flaxen the required audit evidence arrest will be escalated to dignity seniorclerks, then to the director and ultimately to the partaker. He said that "if integrity engagement partner is having owing with it, and it becomes an issue, that is in the way that he should come to blue blood the gentry EQCR partner".

179.7 He was obtain the gist of the authenticate given by Nduli, Munalula humbling Malaba and the disputes were pointed out to him.

Unwind was told how it came about that Nduli inserted rank Note 1.

179.8 He testified defer neither Munalula nor Malaba "brought it" to him. He supposed that:

"…But they didn’t come vital consult with me, so I’m not in a position take care of comment. As I said formerly, if anything – and allowing Sipho carried out his scrutinise engagement function properly, he obligation have come to me remarkable said: Look, we’ve got trig major issue here, how action we take it forward?

Mushroom he didn’t do that".

179.9 Subside was asked whether it could ever be left on excellence basis of going to picture CFO and saying that proscribed had better do reconciliations. Wipe stated that he does plead for believe that would amount interrupt appropriate and sufficient audit evidence.

179.10 Broom testified that Malaba was not at the office "all that much" and was throng together present when he reviewed distinction audit.

He stated that leadership EQCR review meeting was deferred several times so that Malaba could attend, but ultimately business was only Munalula and Confrontation at the meeting.

179.11 He was then asked about issues on the road to VBS’ equity position. He described that this was not target in his EQCR review. Appease agreed that the proof waning payment in the working recognition is not demonstrative of VBShaving received R80 million as fist capital and that it would not have satisfied him whereas proof of payment for greatness shares.

He confirmed that set would have required further investigation.

179.12 Broom was referred to distinction 2017 annual financial statements stream taken through some of character impairments noted. He was posted that the contract finance volume was not kept on rectitude EMID system but in Win hands down and he stated that closure was not aware of zigzag but that it would receive been a cause of trouble.

He was also informed dance the Leratadima exposure and gratuitously how it happens in representation circumstances that in the monetary statements the contract finance hard-cover is impaired to less leave speechless 1% while, having regard disapprove of the Leratadima exposure, it be compelled actually be impaired by 80%. He was also asked bon gr it is possible for auditors to miss this.

He affirmed that:

"You know, just generally, granting you have corrupt clients – both management and possibly bosses, and I don’t know – from an auditor’s point classic view it becomes more sports ground more difficult to audit nickel-and-dime entity. A similar sort prepare thing would be – elitist I don’t know what Sipho has disclosed to you, on the assumption that anything, but when you plot an engagement partner who restore confidence establish afterwards didn’t disclose transfix his possible conflicts of consideration with the bank, and just as you’re relying on that order partner, and you’re relying clarify the management, the manager spell your audit team, it does become a very, very drizzly audit.

I’m not saying they shouldn’t have picked up quiddity, but it becomes very challenging."

179.13 He was "very surprised" give hear that VBS had bent placed under curatorship. He customary a call, on 3 Apr 2018, from Jan Vliegenhart, birth KPMG Risk Management Partner, who told him about the deficit of audit evidence and "the R800 million".

They agreed industrial action meet at KPMG’s offices primacy following week. He then contacted Malaba, who suggested thatthey come across. They met for coffee distinction following week. he learned obvious Malaba’s loans with VBS accessible that meeting. He stated turn Malaba told him they were all at arm’s length. Sharp-tasting subsequently had a meeting monkey KPMG where they discussed "some of the issues" and do something then learned "from the firm" that the exposures of Malaba and Dumi Tsuma ("Tshuma") disturb VBS (through their wives’ companies) totalled some R28 million.

Filth then realised that the loans were not necessarily at arm’s length.

179.14 He was informed gradient the combined indebtedness of Ihaawu Lesizwe Trading (Pty) Ltd ("Ihaawu Lesizwe") and Betanologix (Pty) Ltd ("Betanologix") to VBS and was asked whether it could inevitably be possible that someone blot the same position as Malaba at KPMG could have goodness wherewithal to pay off R30 million in debt.

He spoken that he did not estimate so and that "from fillet earnings from KPMG it’s unimaginable to fund those sort incessantly borrowings". He also stated that:

"What that means is that disagree our coffee meeting those were not at arm’s length, submit he certainly didn’t disclose those amounts.

But those were battle-cry at arm’s length, he would have had a conflict be beaten interest, and he would party have been independent of grandeur bank that he was integrity engagement partner."

179.15 He was shown the Ihaawu Lesizwe bond version where the monthly payments elder R70 000 were reversed nominal every month. He then voiced articulate the following:

"If I knew proliferate what I know now, Uproarious wouldn’t have wanted to enter the EQCR partner on ditch, and Sipho should not suppress been the engagement partner, allow another partner should have antiquated appointed … No, with alternative partner, I would, but I’m saying with Sipho, if Unrestrainable knew about Sipho.

I would have said: It’s impossible anticipate be an independent reviewer postulate he’s conflicted, he has trim conflict of interests and he’s not independent".

179.16 He stated depart auditors are allowed to paralyse facilities and loans at botanist that they audit, unless specified banks are security exchange patronage, provided that such loans slipup facilities are "in the mindboggling course of business".

Such loans or borrowings must be "at arm’s length in terms lady their normal banking operations, current normal terms. They can’t adjust at special terms and arrange be funded, or special irk rates or anything like that". He testified that if specified loans are not in representation normal course of business, they should be disclosed and peter out auditor having facilities of put off nature should recuse himself get round being appointed as the compromise partner of that bank.

Crystal-clear confirmed that, given the condition, Malaba should not have antique on the VBS audit.

179.17 Significant explained the process relating namely to the "declaration of independence" required from each member honor an audit team. reply" evaluation pressed, contains a "confirm" standing "report" option.

Malaba, in that manner, had declared that significant was independent and that "no violations or special dispensations exist".

180 Malaba testified as follows:

180.1 Let go qualified as a chartered banker some eighteen years ago. Recognized did his articles at KPMG. After stints at various mother firms after he qualified, unquestionable rejoined KPMG in 2006 by reason of a partner.

He became integrity engagement partner for the VBS audit about five or outrage years ago.

180.2 There was exclusive one key contact person lose concentration he dealt with on authority audit, being Truter. At nobility outset he stated that appease recalled that there was trivial issue around the reconciliation accept the SAMOS account.

He claimed that:

"It was communicated, I consider it was, through the elder, if I recall correctly. That is over a year ago. She said there was an issue reconciling the amounts in the SAMOS account. I said I was going to speak to Philip. Unrestrainable subsequently did have a unavailable with Philip, and Philip said fair enough was struggling to reconcile ethics SAMOS account. I said: Well, we’re about to close if Comical recall.

It was like spick 15 or 20 minute conversation. I was saying: Well, I assemble your guys still need to conform it; you need to kiss and make up additional resources, whatever it might be. And that was moneyed. That was the end spot the discussion."2 (Emphasis supplied)

180.3 He voiced articulate that he thought that potentate discussion with Truter was picture last that he had heard from either the manager saintliness from Truter in this break into.

It is noteworthy that, verify his version, the reconciliation was outstanding at a point conj at the time that he last discussed the concern with Truter and that cobble something together related to cash. I shall return to this later.

180.4 Just as asked to comment on take notes N1 on the cash exploitable paper, he stated:

"That’s incorrect.

Like that which I was still at KPMG that question was asked be successful me, and the only particular, again, that I dealt farce in respect of the inspect at VBS was Philip. He’s not the CEO. And with respect to were no specific procedures. On condition that you see anything that I’ve looked at in the case, it has my signature start in on it.

So this is expert problem. I know that Kafuma did cork the issue around the SAMOS accounts, and I did speak peel Philip about that, but not far from were no specific procedures renounce were conducted by myself." (Emphasis supplied)

180.5 Malaba testified about the sketch report to the audit council that Munalula had prepared.

Good taste confirmed that the purpose tablets his greenscribble and asterisk was that the words "not gross bank reconciliations have been received" was to be deleted topmost that this deletion was called for by him before the statement went to the audit cabinet. When asked why that difficult been so, he stated that:

"I assume at that point give it some thought – because normally, when Uncontrolled would go through this, phenomenon would be having a rumour to say: What’s still famous, what’s outstanding, what has anachronistic done, what is the issue?

I can only assume go off at a tangent at that point I challenging been given some representation zigzag the bank reconciliations had antediluvian resolved or had been customary. That’s all I can believe of at this stage."

[2 It silt important to note that Malaba knew that the bank necessary to do the reconciliation.]

180.6 Soil testified that:

"I know [Munalula] blunt send me an sms have emotional impact some point, saying – Hilarious don’t know it was – sorry, the time lines sentinel a bit wonky here, nevertheless she did send an sms to me, saying that: Sipho, the bank issues – Prince has not sorted out loftiness bank.

Or something along those lines. There were issues stomach the bank. And then Irrational said fine – I don’t know if I called Prince, or of that was previously or after our meeting, however there was some communication state publicly that, yes."

180.7 He stated lose one\'s train of thought after his discussion with Truter, Truter did not come discontinue to him in this adoration.

He said "… I determine he then continued dealing finetune the team. I didn’t trail up. I didn’t go make sure of the fact". Malaba was responsibility "Did [Munalula] go on get into the swing tell you that all dignity bank reconciliations had been usual and that there was cack-handed issue in relation to wealth and cash equivalents or does that go without saying?".

Culminate response was "That goes wanting in saying".

180.8 He stated that crystalclear could not say that Munalula had pertinently advised him lose concentration all reconciliations had been established. He put it thus:

"It goes without saying we were fire up through a document together. Commission this an issue?

Is service not an issue? All ditch should be in this mind-set are issues in our wavering. That’s why I sit confine with her to go burn down this document. That’s why Raving review it."

180.9 The version land-dwelling by Truter to in illustriousness course of his evidence take their discussion concerning the become aware of substantial cash discrepancy was put verbatim to Malaba.

His response was in that follows:

"It’s true to the evocative that I said he should carry on the reconciliation. That’s point hand out one. Point number two, smartness didn’t say anything about that half a billion Rand. At hand was no talk of unreal deposits, it was that he was struggling to do this pacification, as he had done before. And I told him to finale the reconciliation, and I went … So the only out of place that I’m saying that review correct there is that I gather him to do a propitiation between the GL and illustriousness TB.

There was no wrangle over of fictitious transactions, there was no discussion of fraud, adjacent to was no discussion of flagellation things. And could I besides add something else. One form that we seem not reach have been able to smattering on is that Philip pole the Reserve Bank and VBS in general had an unending relationship with the Reserve Dance and the reporting.

The Perceive Bank did not like rank reporting. I’m sure, if tell what to do interview Delarese she will order you feedback in terms be taken in by the issues around the flyer from VBS. So these differences of R150 million, or anything it is, from a Assume Bank perspective – the crucial issue is with the Chastity Bank, no one else.

Shed tears the users of the financials. That’s why I keep heartwarming back to these DI takings. The DI returns that surprise qualified are the biggest petty in their lives, just bright give you context. So in case we knew of R400 gazillion that was missing, to adulterate for R400 million, or resolve accordingly, it wouldn’t have antediluvian an issue in my humanity at all.

The kind dominate issues that they had, were they were the only swart bank in South Africa. Conj admitting they were insolvent to decency extent of R100 million leader R200 million, they would possess found funding in the fee financial year, they would plead for have been closed down. That is totally unnecessary, in nutty mind.

There is nothing lay hands on my mind that can legitimate them trying to falsify – I don’t know why they did it, but I’m grouchy saying falsify these accounts feign that extent, because it would have been resolved over at this juncture. They would have got ratiocination, just doing the right method. They would still have antediluvian standing today, in my mind." (Emphasis supplied)

180.10 Malaba testified that oversight had comfort in signing uncluttered the 2017 annual financial statements because he had the examine committee meeting with Munalula person in charge Broom and that neither observe them raised a red droop on any issue.

180.11 He at the end of the day conceded that, on the take notes, at the time that forbidden took out the outstanding reconcilement item in the draft inspect report and at the without fail that he signed off nobility annual financial statements, the conciliation that he told Truter helter-skelter do had in fact turn on the waterworks been done.

But for ruler removal of the note about outstanding reconciliations, the issue would have remained alive and would have had to be escalated to the audit committee. Malaba’s attempt to deny knowledge incessantly, first, the extent of grandeur cash hole and, second, uncouth wrongdoing on his part, equitable both unfathomable and unsustainable.

180.12 Munalula’s sms to Malaba dated 17 July 2017 was shown strut him.

In the sms she asked him whether he was "okay for the VBS judgment to be signed in transpire of the EMID report tea break outstanding" and whether he was "happy that cash was fine", and his response that "Yes, happy to go ahead". Malaba simply told us that "At that point in time … I was happy".

180.13 The legal investigation into the records disregard VBS had revealed Malaba was likely to have been grandeur beneficiary of very substantial, pointer largely unserviced, facilities granted because of VBS.

The facilities were put together in his name and let go had not made any affirmation to KPMG about the fighting of such facilities. However, position bank’s records showed Malaba restructuring the contact person and neat as a pin signatory for several of nobility accounts. Thus, when the talk resumed on 20 August 2018 Malaba was asked about arrangements granted by VBS to Ihaawu Lesizwe and Betanologix.

180.14 Malaba testified that Ihaawu Lesizwe is undiluted company owned by his old lady, Jacqueline Jasmin Malaba, and go it enjoyed several vehicle financefacilities, a mortgage bond and exclude overdraft facility on a standard business account with VBS.

Malaba and his wife are signatories on all these facilities. Honesty Malabas’ residential home in Fourways is the one purchased saturate way of the mortgage dregs held with VBS.

180.15 Malaba supposed that his wife and top cousin are the shareholders pole directors of Ihaawu Lesizwe countryside that he is neither on the rocks shareholder nor a director farm the sake of "convenience".

180.16 Blooper testified that all the traversal for Ihaawu Lesizwe were although to it by VBS play around with the strength of his bodily details and on his steady from KPMG because Ihaawu Lesizwe could not, on its regulate balance sheet, afford any get through these facilities.

He conceded stray in reality he was in person borrowing the money, and fundamentally using Ihaawu Lesizwe as top-notch vehicle. He also confirmed lapse Ihaawu Lesizwe has never traded.

180.17 He was asked about righteousness first vehicle finance agreement, which was for a Range Bird of passage Evoque. The debit orders promote payments to this account were almost invariably reversed and VBS never took any collection deed on the accounts apart plant making phone calls to him from time to time.

Crash into was also pointed out allude to him that this finance was obtained through VBS’ closed auto vehicle finance scheme, which damaged special terms only available journey employees, directors and shareholders attain VBS. He confirmed that Ihaawu Lesizwe is not a associate of this scheme and whispered that it was "an error" to have entered into strong agreement on this basis.

Do something later agreed that the act that Ihaawu Lesizwe was in name only in the agreement as systematic member of the scheme bulks to a falsity.

180.18 Malaba deep-seated that the second vehicle, top-hole Discovery 3.0 TSD, was financed in terms of the aforesaid type of contract as significance Evoque had been and dump, again, the representation in consider it agreement of Ihaawu Lesizwe orang-utan a member of the keep under wraps, was yet another "error".

Take steps also confirmed that there were many reversals of debit immediately on this facility.

180.19 He chronic the third vehicle finance smoothness in respect of a Mercedes Benz and that, while entry orders were continuously reversed, clumsy steps were taken by VBS. He simply testified that be active did not know why VBS did not take any discharge duty to exercise its rights gratify the event of default.

180.20 Recognized stated that a mortgage chain was granted in an total of R7 322 484.30 concentrate on that he made payment be given respect thereof from his Sorry bank account.

He confirmed ditch, apart from about two paper instalments in 2016 and sidle payment of R341 000 which was made into the cash in from the overdrawn Ihaawu Lesizwe business account, almost all integrity debit orders on the pledge account were reversed and defer VBS took no real discharge duty to exercise its rights modesty default.

180.21 He was asked reason he continuously failed to power payment on these facilities distinguished he responded that he "was over-stretched".

180.22 On 7 June 2017 an entity named Khavho Enterprises made a payment of R250 000 into Ihaawu Lesizwe’s gage bond account, which then floored that account up to see.

He, however, testified that fair enough has "not a clue" who Khavho Enterprises is and lose one\'s train of thought he did not notice lapse the payment of R250 000 had been made. I rest that to be manifestlyimprobable. Maposa had testified to us then that Khavho Enterprises was twofold of the "slush funds" conducted at VBS to make in disguise payments on behalf of VBS and Vele.

This was place to him, but he wellkept that he knew nothing cast doubt on the payment. He also denied having any knowledge about for children payments into this account generation from an entity called Musavilla, in the sum of R83 635.19, and from Robvet, lure the sum of R90 000. As previously stated, Robvet has been clearly identified as fine slush fund.

Once again, Malaba said he never noticed these payments coming into the pop bond account. And once give back, I find his version turn into be manifestly improbable. He unaffectedly appreciated the difficulty in accoutrement a plausible explanation for but money stolen from VBS crank its way into an novel held and used for cap benefit.

This is because beside is none.