Municipalities unlawful investment and loss of R100 mil, VBS Bank

FF Plus

Municipalities unlawful investment and loss of R100 mil, VBS Bank
Municipalities unlawful investment and loss of R100 mil, VBS Bank

Today in the Gauteng Legislature, the Gauteng MEC for Finance, Barbara Creecy, gave an inadequate explanation for why the West Rand District Municipality and the Merafong City Municipality unlawfully invested a total amount of R100 million in VBS Mutual Bank.

It is unacceptable that the ANC government allowed R100 million to be lost because officials broke the law.

It does not look like the provincial government is serious about holding the guilty officials accountable.

The FF Plus insists that action must be taken against the respective municipal managers and mayors of the two municipalities. As accounting officials, the municipal managers are required to ensure that the law is complied with in all respects. The investments made in VBS Mutual Bank are in contravention of the Municipal Finance Management Act (MFMA) and, therefore, the MEC must ensure that the relevant officials are charged with fraud.

These municipalities ignored the National Treasury’s warning not to invest money in VBS Mutual Bank.

According to Creecy, the mayors of the two municipalities approached her about the problem and asked her to launch a forensic investigation into the matter. She also said that the Gauteng provincial government will cooperate with the National Treasury and the national Department of Cooperative Governance to solve the problem related to the municipalities’ investments in VBS Mutual Bank.

The FF Plus believes that it is unlikely that the two mayors would have approached the MEC with such a request. It seems that there are more irregularities with these investments than we initially thought.

If the mayors did indeed make the request, it would mean that the municipal councils of the two municipalities did not approve these investments, but that officials just made the decision to invest vast sums of money in VBS Mutual Bank on their own.

Last week, the FF Plus requested the municipalities to disclose the minutes of the council meetings where the investments were approved.

The paying residents are the ones on the losing side because millions of rands have been lost and as a result, service delivery is deteriorating even further.

For the sake of the taxpayers, the FF Plus will not cease in bringing this matter to a head so that the guilty officials can be held accountable and can be criminally charged.

Read the original article by Philip van Staden in Afrikaans on FF Plus

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