The High Court in Pretoria has granted South Africa's financial regulator, the Prudential Authority, permission to liquidate the VBS Mutual Bank.
This comes after the Reserve Bank published a 148-page report into VBS Mutual Bank by advocate Terry Motau titled "The Great Bank Heist".
Motau found widespread looting at the bank and recommended that it should be wound up because it simply cannot be rescued.
The forensic report revealed an estimated R2 billion in deposits, many from municipalities, were stolen.
Advocate Vincent Maleka told the court that the Prudential Authority’s application to liquidate the bank was not being opposed.
The Prudential Authority falls within the central bank, EWN reporter Barry Bateman explains.
A liquidator will now be empowered to use legal mechanisms to start recovering funds from recipients where transactions were found to be void and impeachable.
Bateman says this is a separate process to potential criminal charges for unlawful beneficiaries.
There was no opposition to this particular application.— Barry Bateman, EWN reporter
Advocate Vincent Maleka, for the Prudential Authority, told the court that was no opposition.— Barry Bateman, EWN reporter
The authority had argued that VBS is unable to pay its debts and is commercially and insolvent. And it is further factually insolvent in that its liabilities exceed its assets.— Barry Bateman, EWN reporter
We can now start the process, through the legal mechanisms, to recover whatever money is still available from those people who had benefitted. This would be aside from whatever criminal prosecution would come from this.— Barry Bateman, EWN reporter
The SA Institute Of Professional Accountants (SAIPA) says those who are accused of embezzling funds will be investigated.
SAIPA's Faith Ngwenya explains that all the debts owed to the bank will be collected.
All the bank's assets will also be sold to try and refund the investors.
They will look into all of that and see how much can be collected from those that are guilty of misappropriation.— Faith Ngwenya, Technical & Standards Executive at SA Institute Of Professional Accountants
Listen to the EWN update and the SAIPA exec on The Xolani Gwala Show:
This article first appeared on CapeTalk : Court grants VBS liquidation (now beneficiaries and looters will have to pay up)