South African president Ramaphosa denies ignoring fraud at failed bank

South Africa’s President Cyril Ramaphosa on Monday denied accusations that he ignored widespread looting and financial misconduct at a major retail bank that collapsed weeks after he came into office.

VBS Mutual gained notoriety in 2016 when it lent scandal-tainted former president Jacob Zuma $540,000 (466,000 euros) to repay taxpayers for upgrades he made to his private home.

Ramaphosa dismissed local media claims that he was forewarned about massive fraud at VBS months before it collapsed earlier this year while he was still deputy president and that he failed to act.

“The presidency categorically rejects reports that President Cyril Ramaphosa failed to take action on the VBS Bank saga despite being alerted to irregularities back in 2017,” said a statement from his office.

“The allegation is baseless and unsubstantiated.”

His office added that “the claim that President Ramaphosa was forewarned about the impending implosion of VBS Bank is unsubstantiated.”

The bank collapsed in March, a month after Ramaphosa took over from Jacob Zuma, who was forced to resign in February.

A probe commissioned by the country’s central bank showed that the bank failed after 1.9 billion rand ($130 million) was looted over three years.

The investigation’s damning report, titled “The Great Bank Heist”, described the bank as “corrupt and rotten to the core”.

It implicated 53 individuals including senior members of the ruling African National Congress.

The probe also revealed malpractice including the supply of overdrafts to well-connected clients and payments made to individuals in exchange for deposits from state-owned companies.

The investigation was launched after VBS suffered a liquidity crisis and was put into administration earlier this year.

By 2017 the bank had 30,000 clients and deposits worth $55 million, according to local media.

Some analysts suggested that Ramaphosa turned a blind eye because he feared jeopardising his chances of winning the ANC’s party leadership and his subsequent ascent to the presidency.

Comments

comments

LEAVE A REPLY

Please enter your comment!
Please enter your name here