The Auditor General (AG) has reported that municipalities lost R1.6 billion after investing in the now-defunct Venda Building Society (VBS) Bank.
VBS Bank collapsed in 2018 due to extensive looting and maladministration. Despite a directive from National Treasury warning against such investments, several municipalities in Limpopo proceeded to place public funds into the bank.
Speaking at the National Press Club in Pretoria on Thursday, Auditor General Tsakani Maluleke revealed that her office had issued 13 material irregularity notices concerning the investments made to VBS Bank.
“The money that was recovered is still quite little. At the last count, municipalities where we had raised this MI [Material Irregularity], municipalities that had lost R1.6 billion, they had recovered R107 million, merely 7% of what they would have lost, which is a real tragedy because this is money that should have gone into fixing and building infrastructure so that citizens could enjoy service delivery,” Maluleke explained.
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