World News

The mastermind of South Africa's $130 million bank scandal has been jailed

A man has been sentenced to 15 years in prison for orchestrating a banking scandal worth $130m (£100m) that sparked widespread anger in South Africa, according to the country's police service.

 

Tshifhiwa Matodzi served as the chairperson of VBS Mutual Bank, which unfortunately experienced a collapse in 2018 due to long-term looting.

 

The scam extended from impoverished rural villages to government circles, deceiving ordinary South Africans.

 

During the court hearing on Wednesday, Matodzi admitted to being responsible for 33 different charges, including corruption, theft, fraud, money laundering, and racketeering.

 

The former bank boss has been sentenced to 495 years, receiving 15 years for each count. Nevertheless, the court has ruled that the sentences will be served concurrently, resulting in a 15-year jail term.

 

In 2018, a report was released following an investigation ordered by the central bank, which referred to the scandal as "the great bank heist."

 

For many years, VBS operated as a modest entity - a mutual bank primarily owned by its depositors. It was crucial in assisting rural communities living on land controlled by traditional rulers, providing them with mortgages, and helping them save for family funerals.

 

However, at an astonishing pace, VBS supposedly morphed into a fund used by dishonest politicians, local government leaders, and their associates in a remarkably intricate and cynical pyramid scheme.

 

The bank's owners allegedly engaged in corrupt practices by influencing local officials in several South Africa's most impoverished and dysfunctional municipalities. They reportedly convinced these officials to redirect, or falsely claim to redirect, their budgets to benefit VBS in exchange for monetary rewards and gifts.

 

It was not until VBS came under the control of South Africa's central bank that investigators uncovered the complete scale of the alleged looting and political intrigue.

 

VBS went into liquidation in November 2018.

 

Matodzi allegedly orchestrated the looting, aided by a team of skilled accountants, lawyers, and an intricate web of potentially deceitful shell companies and subcontractors.

 

While several individuals have been arrested in the VBS case over time, only Matodzi and former VBS chief financial officer Phillip Truter have been convicted and sentenced.

 

The Directorate for Priority Crime Investigation (DPCI), also known as South Africa's elite Hawks police unit, has stated that it is actively investigating corruption and pursuing additional suspects in the VBS case.