A former senior executive of the scandal-ridden VBS Mutual Bank has revealed that a branch manager was ordered to make a R3 million payment to fund the national congress held by the SA Communist Party (SACP) last year, allegedly in exchange for the party’s silence on the bank’s relationship with the controversial Gupta family.
City Press can reveal that Vele Investments, which is the majority shareholder of the soon to be defunct bank, used one of its subsidiary companies to pay the SACP’s R3 million bill for the use of facilities at the Birchwood Hotel & OR Tambo Conference Centre in Boksburg, Ekurhuleni.
The senior executive, who was at the centre of the bank’s activities and has requested anonymity, has told City Press how Vele Investments – VBS’s parent company – conspired to use a subsidiary company account to conceal the link to the SACP payment.
The senior executive’s revelations are the first to draw the SACP national office into the VBS saga after it fiercely denied any links to the bank.
The ANC has already admitted that it received R2 million from VBS, and has undertaken to pay the money back.
The senior executive alleged this week that a senior SACP official demanded a R3 million payment from former VBS chairperson Tshifhiwa Matodzi to stop making “noise” about VBS’s relationship with the Gupta family.
In January last year, almost a year after the country’s four major banks closed the accounts associated with the Guptas, VBS announced that it was following suit after discussions among the bank’s bosses.
Months later, the SACP learnt that VBS had allowed Gupta entities to open new business accounts.
The senior executive detailed how Matodzi ordered the branch manager to make a R3 million payment a day before the start of the SACP’s national congress.
“On July 6 2017, he [the branch manager] got a WhatsApp message from Matodzi saying that he must make a payment of R3 million for the SACP national congress.
"Matodzi told him that he was getting pressure from SACP leaders to have that payment done because the SACP congress was starting the following day.
“He was instructed to move R4 million from Vele Investments’ bank account to MML Food Services’ bank account.
"From there, R3 million was directly transferred into the Birchwood Hotel & OR Tambo Conference Centre’s bank account with the reference of the SACP. This was done to ensure that it cannot be traced.”
MML Food Services is a subsidiary of Vele Investments, which was a majority shareholder in VBS. Matodzi, who was the chairperson of both VBS and Vele, is the central character in the VBS scandal.
Matodzi and his associates have been positively identified as the main beneficiaries of the massive fraud at VBS.
In the explosive forensic report released by the SA Reserve Bank last month, which was authored by Advocate Terry Motau, MML Food Services is mentioned as one the companies that received a R19 million deposit and a R17.5 million facility from sister company VBS.
Matodzi declined to comment yesterday, saying: “I have no comment on anything that has to do with VBS.”
The chief executive officer of MML Food Services, Ronald Letsoalo, and Birchwood Hotel & OR Tambo Conference Centre director Jazzman Mahlakgane ignored repeated requests for comment.
The senior executive also revealed that the system had to be programmed to allow the R3 million to go off and be available in the next bank immediately.
“We had to make the payment with RTC [real time clearance]. The intention was to silence SACP leaders from exposing Gupta accounts with VBS,” the senior executive told City Press.
According to the senior executive, a branch manager has the authority to make a payment of up to R1 million.
Any amount above that has to be authorised by the senior executives at the corporate office level.
Another insider within VBS said it appeared that the SACP leaders and VBS executives reached an agreement that R3 million would be paid to cover the costs of the SACP’s national congress.
“It means that there was a prior arrangement. Delegates at the SACP congress enjoyed water and food paid for by VBS,” the insider said.
The senior executive said all the transactions done by the branch manager were ordered by Matodzi.
“He would say to the branch manager via WhatsApp or telegram [a secure communications mechanism]: ‘Pay this much to this account.’ All the things the branch manager had paid for were because he got an instruction from Matodzi.”
The senior executive said the branch manager told investigators about the payment that was made on behalf of the SACP.
“They interviewed him. He told them about the payment he was ordered to make on behalf of the SACP. They omitted to mention that SACP benefited from VBS in the report.”
However, SACP national spokesperson Alex Mashilo denied that the party received money from VBS or Vele Investments.
When asked yesterday about the sponsors of the SACP’s national congress last year, Mashilo said: “It comes across as a generally fishing question to ask who has ever made a donation to the SACP.
“At its special national congress held in July 2015, the SACP published a financial report for the period dating back to its 13th national congress held in July 2012.
"The report published a number of details, including an assessment of SACP membership fees and levies. It also identified a number of donors, of whom the core are trade unions.
"The next financial report, which was made available at the 14th national congress of the party in July 2017, categorised the sources of income received with due regard to the rights of all parties.”
Mashilo said that the party’s record spoke for itself.
“It is utterly unfair to make a sweeping allegation against SACP leaders. The SACP has many leaders. The allegation is obviously senseless
and dismissed with contempt.
"The SACP is on record [as saying] that, should any incontrovertible evidence of corruption involving the complicity of its members emerge in any scenario, the party will take decisive against that member,” he said.
This week, the SACP in Limpopo suspended its provincial secretary and former Capricorn District Municipality mayor Gilbert Kganyago, whose council illegally deposited R60 million into VBS when he was in charge.
Mashilo said the party had been consistently vocal against the Guptas.
“It is common knowledge that the SACP has been consistently vocal and mobilising against the Guptas’ capture of state authorities in particular and capture of the state in general. The party will not stop, but deepen this just struggle,” Mashilo said.
Matodzi, along with his co-directors and his friend Robert Madzonga, stands accused of facilitating the looting of nearly R2 billion at VBS.
ANC leaders, notably ANC Limpopo deputy chairperson and Vhembe District Municipality mayor Florence Radzilani and treasurer Danny Msiza were also implicated in the Motau report into the VBS scandal.
Radzilani is mentioned in the Motau report as having complained that she “only” received R300 000 for ensuring that millions deposited by the Vhembe District Municipality into VBS were not withdrawn.
Radzilani wrote to ANC secretary-general Ace Magashule last week to deny any involvement in the VBS investment.
Msiza is challenging the report in court.