The VBS Mutual Bank Scandal: Limpopo Businessman Sentenced, Ordered to Pay Back Money

A complicated corruption scheme that started in 2015 saw the VBS bank receive a deposit of R120 million from municipalities and redistributed the money to a small group of bank executives, their companies, friends including Keaobaka Remigious Kgatitsoe, and other municipality officials that involved bribing. Vele Investments, an investment company owned by the VBS the chairperson, was the primary beneficiary. Vele used the VBS money to run investment companies and even buy shares in VBS mutual bank. Eventually, VBS ran out of money in February 2018 and was placed under curatorship in March 2018 after an intense row with the National Treasury and Reserve Bank. In November 2018, VBS Mutual Bank was declared bankrupt, and a final liquidation order was granted.

More than 27 people have been arrested for helping with the investigations and recovering the money. After the investigation, Keaobaka Remigious Kgatitsoe was charged with money laundering. Kgatitsoe was assisting the chief financial officer of Fetakgomo Tubase Local Municipality in submitting fake invoices to VBS to make it look like the VBS Mutual Bank was stable. As a result, Kgatitsoe received huge sums of money through his accounts and later paid a significant portion of the money to the chief financial officer. Kgatitsoe was sentenced to five years imprisonment and ordered to pay over R460,000 to the VBS’ liquidator. However, Kgatitsoe entered into a plea deal with the state, which saw his imprisonment suspended – News Desk