Johannesburg – The West Rand District Municipality may have lost as much as R224.5 million after it illegally invested in the now-defunct VBS Mutual Bank, according to a 2019 forensic report by audit firm Deloitte.
Although the municipality officially only had R81 million invested in the bank at the time of its collapse in mid-2018, Deloitte analysis of the municipality’s deposits and withdrawals suggest that the loss could be much larger.
According to the report, the municipality invested R389.1 million in total with VBS from 24 February 2015 to 28 February 2018. It withdrew R164.6 million during the same period.
Another Deloitte investigation at Merafong City Local Municipality shows it invested R50 million, which is unlikely to be recovered.
Merafong and West Rand were the only two Gauteng municipalities to invest with VBS.
The largest share of the bank’s deposits came from poor municipalities in Limpopo and the North West.
The two Gauteng reports provide insight as to how VBS cosied up to municipal officials who made the investment decisions.