By: Angie Nkuna
Giyani- Greater Giyani Municipality (GGM) has condemn the reports that suspended officials received back pays after investing the money into VBS Mutual Bank.
According to media reports, It is alleged that suspended officials who are responsible for investing 158 million rand into VBS Mutual Bank received financial kickback after investing the money.
The names of suspended officials aren’t yet clear to Giyani View. GGM’s spokesperson, Steven Mavunda hasn’t denied nor confirm the suspension of the officials in question, but refuted allegations that the officials have received financial kickback.
Giyani View understands that GGM has invested R158m of its R302m operating revenue with VBS, and according to the National Treasury executive, it is only a matter of time before some of these municipalities are unable to pay salaries.
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 Vele 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 its clients.
Another Treasury executive said this money was part of municipalities’ annual budgets and not extra money that the councils could function without.