How PIC men got paid

2018-07-15 06:00

Both of the Public Investment Corporation’s (PIC’s) representatives at VBS Mutual Bank were paid millions to look the other way as the bank got looted into the ground by Vele Investments. And, in a new twist, another VBS non-executive director has been suspended from his day job – the finance boss of the SA Police Service (SAPS).

Paul Magula was fired as executive head of risk at the PIC in April for incompetence. A senior source in the PIC at the time told City Press it was astonishing that he sat on the VBS board to the bitter end without raising any red flags.

The PIC even put R90 million into VBS late last year when the bank conducted a rights issue, an invitation to existing shareholders to buy more shares in the company.

City Press has established a credible reason for this: Magula received at least R5.05 million from VBS’s major shareholder, Vele, between December 2016 and February this year. He received these payments while he was a non-executive director of VBS meant to safeguard the interests of the PIC, which is a 25% shareholder in the bank. Magula also received a R4.8 million mortgage from VBS last year.

Reams of bank statements included in VBS curator Anoosh Rooplal’s liquidation application against Vele show that Magula was paid R1.75 million between December 2016 and July 2017. The payments are from Vele Investments to “Magula P”.

After that, similar monthly payments began being made to a company called Hekima Capital, which has Magula’s home address as its registered business address. Hekima received monthly payments until February this year, totalling R3.3 million.

The payments to Magula and then Hekima, coincidentally, total R5.05 million – the same amount that was allegedly given as a bribe to an unnamed “senior PIC executive” in cash, according to Rooplal’s explosive affidavit in support of the liquidation of Vele filed on Friday, July 6.

Two days ago, the PIC announced that its other representative at VBS, Ernest Nesane, had resigned after revealing new evidence to the investigators working for the VBS curator. This suggests Nesane was the “senior executive” paid in cash, meaning both PIC men got R5 million.

Read: VBS ‘paid bribes to PIC, Prasa officials’

Nesane was the PIC’s executive head for legal counsel, governance and compliance, making the involvement of him and Magula, the PIC head of risk, in the VBS scandal deeply ironic and embarrassing for the continent’s largest asset manager.

This week, Magula told City Press that he never received any cash or payment from VBS, but he would not comment on the bank transfers from Vele to him and Hekima which are visible in documents now before the court.

“I would rather reserve comment. I would like the investigation to proceed. I have given my statement to the investigator,” he said. He did say that Hekima was an “advisory company”.

While Hekima is registered at Magula’s home address, he was a director of Hekima for only a brief spell in 2016, and the company currently has only one director: Lot Magosha. Magosha told City Press he bought Hekima from Magula and that it was an “empty” shelf company at the time.

He claims the money paid to Hekima in monthly instalments were all loans that will be paid back to Vele. However, in Vele’s bank statements, only one of the Hekima payments is identified as a “loan payment”. Strangely, two Hekima payments are called “salaries”.

Top cop was on the scene

Magula and Nesane are not the only non-executive directors of VBS in trouble. The suspended chief financial officer of the SAPS, Phalaphala Avhashoni Ramikosi, is also an independent nonexecutive director at VBS. He is also a member of the bank’s board audit committee as well as its risk and compliance committee – theoretically, making him one of the key checks on the other VBS executives’ alleged plundering of the bank.

Ramikosi is, however, currently on paid suspension from the police service. SAPS spokesperson Vishnu Naidoo would not reveal why Ramikosi was suspended. “We will neither be discussing the circumstances nor the merits of his suspension as this is an internal process, and it will be dealt with as such,” Naidoo told City Press.

Ramikosi’s suspension was revealed in Parliament last month by national police commissioner General Khehla Sitole.

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May 19 2019