By Blessing Mabunda
Giyani- Gazankulu Liberation Congress (GLC) legal representatives are believed to be building a strong case before they could open money laundering and fraud case against King of Vhavenda, Toni Mphephu Ramabulana, VBS and Greater Giyani Municipality (GGM).
GLC alleged that King Ramabulana has benefited out of GGM’s R158 Million budget in public funds which was invested with VBS by the municipality.
GLC General secretary Gift Maswanganyi says R1,4 Billion will not be recovered as it was spent on Choppers, Mercedes Vianos and Mansions in Sandton, Gauteng.
“We are opening a case of Money Laundering and Fraud at Giyani / Thohoyandou Police Stations”, concluded Maswanganyi.
Giyani View understands that GGM has invested R158m of its R302m operating revenue in VBS and according to the National Treasury executive it is only a matter of time before some of the municipalities are not able to pay salaries.
Meanwhile, the newly established Collins Chabane Municipality with its headquarters based at Malamulele had invested R122m of its R344m operating revenue in VBS.
At least up to 15 municipalities across the country could collapse because they are not likely to recover their R1.5bn investments at VBS Mutual Bank.
Their exposure to VBS was “too large compared to their operating revenue”, according to a Treasury document sent to the affected municipalities in May 2018.
The SA Reserve Bank (Sarb) placed VBS under administration in March, following a liquidity crisis, and the auditor general launched papers to have VBS holdings liquidated and have its administrators sequestrated. VBS’s main source of cash was illegal short-term municipal deposits which it used to fund long-term loans to clients.
Another Treasury executive said this money was part of municipalities’ annual budgets and not extra money that the councils could function without.
“Unfortunately, they have lost all that money.
An executive member of the SA Local Government Association said it was “almost a foregone conclusion that some of these municipalities will crash”.
“We are losing sleep over the issue. The money was strictly for operational issues, not reckless investments,” said the official.
It’s time the rug gets to be pulled off under the feet of officials involved and expose the amount of graft that have exchanged hands in this malfeasance.
Edited by Owen Mafukele