Head of the National Prosecuting Authority Shamila Batohi referred to the alleged theft, which occurred between 2015 and 2018, as “probably the biggest bank robbery in the county," and assured that there would be a further examination of the evidence to ensure that anyone else connected to the crime would be held accountable.
South African citizens and taxpayers were ultimately defrauded of the stolen sum after the publicly owned bank was declared insolvent and bankrupt by 2018.
Among the eight arrested were several high ranking members of VBS bank, including its former CEO, chairman, CFO, treasurer, along with members of its audit committee.
Sipho Malaba, an auditor at KPMG, one of the world’s largest accounting firms, was also arrested for having reportedly received nearly $2 million for his services.
As the qualified accountant responsible for conducting a 2017 VBS audit, Malaba allegedly borrowed money from the bank that he was supposed to be scrutinizing, spending his earnings on luxury cars and paying back the debt he owed the bank from the large cash transactions he was receiving as part of the scheme.
A spokesperson for KPMG South Africa told OCCRP that Malaba no longer works for the firm, and resigned in April of 2018 prior to facing a disciplinary hearing.
The firm insisted that it “has fully cooperated with investigations,” and that “KPMG South Africa today is a very different business compared to three years ago.”
“We are confident that we are on the right path, and we will keep working to make sure we play a positive role in the business community and the nation,” the spokesperson said.
Two others who were arrested served as executives for South Africa’s Public Investment Corporation (PIC), a state-owned corporation that is Africa’s largest asset manager.
Ernest Nesane, who served as the executive head for legal counsel, governance and compliance at PIC, eventually confessed his misdeeds to an investigator after it was determined that he had received the equivalent of nearly $1 million for his role in the scheme.
“We received these payments,” he testified to an investigator, “and it had become clear that these payments were for us so that we would not really raise any issues when there were issues that we would ordinarily have to raise.”
The now-defunct VBS Bank first came under fire in 2016, when it issued a loan to former President Jacob Zuma so that he could repay taxpayers for the money he spent making a series of improvements to his personal residence.
“VBS Mutual Bank applies proven and approved risk-management processes, risk appetite and credit policies. This is what guides all credit approvals irrespective of whom the applicant is,” then CEO Andile Ramavhunga told Bloomberg in response to criticism at the time.
According to online South African Newspaper the Daily Maverick, Mr. Ramavhunga, one of the eight who has been arrested, “steadfastly” denies his involvement in the robbery.
However, the outlet also reports that he received over $1.6 million in what he described as “consultancy fees,” which was used to purchase luxury vehicles and was also funneled into a private account.
