VBS – a ‘perfect example of contemporary corruption’

2018-12-20 12:00

City Press broke the story of VBS going broke and being put into curatorship. It was first to identify and track the ‘epic fraud’ that occurred at the bank and identify the network of politically exposed persons who benefitted.

Explore an interactive interview with City Press business reporter Dewald van Rensburg to find out why VBS is a perfect example of contemporary corruption and what developments he will be watching in 2019.

Scroll down for the text version.

What distinguished the City Press coverage of the VBS looting story?

City Press broke the story of VBS going broke and being put into curatorship. We were first to identify and track the epic fraud that occurred at the bank and identify the network of politically exposed persons who benefitted. Our articles were based on in-depth analysis of leaked VBS bank statements as well as the public records of VBS from the SA Reserve Bank and the deeds office. What distinguished our reporting was that we identified a large part of the fraud before the curator and his investigators published any of their findings. We identified and revealed the channel through which the Public Investment Corporation’s VBS representatives were [allegedly] bribed and also revealed how, at municipal level, pressure was exerted on officials to put millions into the Ponzi scheme that was VBS. We have also highlighted the still unresolved international connections in the saga, including millions missing from Angolan and Namibian investors. City Press also led the field in showing what the looting was actually for, apart from financing the involved parties’ high life. The lion’s share of the money was used to buy businesses for Vele and to build a financial services conglomerate. 

What impact did this coverage have?

You never know. It certainly led to more information making it into the public domain than would have if we simply waited for all the formal investigations to run their course. 

Why does the VBS story matter?

The fraud itself had serious consequences. Municipalities, mostly poor ones, lost hundreds of millions of rands and a network of patronage was built compromising officials in these municipalities, in the ANC, in the EFF, in KPMG and also in the single largest asset manager on the continent, the PIC. The fact that two very senior PIC directors [allegedly] took bribes is in itself shocking. That an auditor at one of the big four audit firms [allegedly] did the same is also, in itself, newsworthy. VBS is a perfect example of contemporary corruption, which requires the cooperation of public and private sectors and the expertise of professionals including (in the case of VBS) a number of chartered accountants. What is interesting is how the VBS scandal seems to be interlinked with other scandals involving a far broader and international network of businesspeople, including the collapse of a Namibian bank

Advocate Terry Motau's report was released in October. What developments will you be watching in the new year?

There will be many more court cases as the stolen money gets chased down the rabbit holes it’s disappeared into – and implicated parties challenge the findings and try to evade the legal consequences. Much of Motau’s report is not public yet and possibly implicates more people. For us, the point will be to not only follow these formal processes, but to tie up the many loose ends that are not dealt with in Motau’s report.

Read a selection of our VBS coverage here.

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May 19 2019