Mahumapelo ‘Vigorously Encouraged’ NW Municipalities To Invest With VBS – Report

PICTURE: News365

JOHANNESBURG: This is according to a forensic investigation report by auditors SekelaXabiso and two highly placed sources, the media report said.

Former North West premier Supra Mahumapelo “vigorously encouraged” municipalities in that province to invest R314m with VBS Mutual Bank, the Mail & Guardian reported on Friday.

This is according to a forensic investigation report by auditors SekelaXabiso and two highly placed sources, the media report said.

It is alleged that Mahumapelo, who resigned in May following widespread protests against him, invited VBS to make a presentation at his Bokone Bophirima premier’s coordinating council in March 2017.

The council was reportedly attended by MECs, municipal managers, mayors, and key government functionaries. The forensic report apparently states: “We were informed during our interviews that VBS was given an opportunity to present their services and that the former North West premier vigorously encouraged the municipalities to invest with VBS, as VBS was a black-owned bank, which offered better interest rates.”

Vuyisile Ngesi, a spokesperson for the North West’s new premier, Job Mokgoro, reportedly told the M&G that VBS was invited to make a presentation at the council.

But, Ngesi said, no resolution was taken, and no approval was given for municipalities to invest with the bank.

Mahumapelo told the newspaper that VBS was invited to make a presentation, along with other banks. He said he had no power to instruct any municipality to invest with any of the banks, and that municipalities are responsible for their own investments. 

The SekelaXabiso report also states that there may have been “some form of political encouragement” for municipalities to invest with VBS since they all invested after the presentation and no risk assessment was done by any of them.