VBS theft – the case against Limpopo ANC’s Danny Msiza and Florence Radzilani

The ANC NEC’s latest decision to reinstate former Limpopo provincial treasurer Danny Msiza and former Vhembe mayor Florence Radzilani contradicts the party’s Nasrec conference resolution that anyone implicated in corruption must step aside until they are cleared. 

Msiza and Radzilani announced in December 2018 that they would step aside after the ANC asked them to vacate their positions. Since then they followed this move with several attempts to reinstate themselves – often blocked by fellow ANC party members. It seems they have now succeeded in their effort.

But what exactly did Msiza and Radzilani do wrong?

In their forensic report, The Great Bank Heist, advocate Terry Motau and law firm Werksmans found that ANC bigwig Danny Msiza was the kingpin in the VBS Mutual Bank municipal commissions scam.

Msiza, Motau found, used his political influence as ANC Limpopo’s provincial treasurer to coerce municipal officials into investing millions of rand in VBS. Msiza, in other words, was the prime “fixer” of deals between the bank and the municipalities. He was handsomely rewarded in turn for playing his part.

Said Motau: “It is clear that Msiza intervened on numerous occasions when his political influence was required.”

VBS Mutual Bank looting suspects appear at Palm Ridge Regional Court on 47 counts of fraud, racketeering, corruption, theft and money laundering on June 18, 2020 in Johannesburg, South Africa. (Photo: OJ Koloti/Gallo Images via Getty Images)

Msiza’s role must be seen against the context of VBS bank managers’ desperate search for government entities to invest in the bank while the same bankers funnelled the money out of the bank for their private benefit.

Radzilani, as Vhembe mayor, is an example of the next link in the chain: After being coerced, municipal mayors or managers ordered substantial amounts to be invested in VBS bank – an act in contradiction of the Municipal Finance Management Act (MFMA). In exchange for their co-operation, these municipal officials were also handsomely rewarded.

As in most successful business deals, “fixers” were used to make it all happen. Another such fixer highlighted by Motau and Werksmans is Kabelo Matsepe. Scorpio wrote about Matsepe here:

https://www.dailymaverick.co.za/article/2019-03-22-the-great-vbs-heist-former-ancyl-limpopo-leaders-r35-4m-spending-list-exposed/

WhatsApp evidence on his phone and confessions by some former VBS bankers suggest Matsepe often fronted for Msiza in playing the middleman between VBS bank and the municipalities, Motau found. Matsepe precisely documented Radzilani’s role in the VBS bank heist in a WhatsApp conversation with VBS robber-in-chief and chairperson Tshifhiwa Matodzi:

“The Mayor of Vhembe is crying she says we must give her and the speaker a Christmas because they are the ones who are making sure we keep that money for six months. We gave her 300k and she cried and said we gave juniors R1.5 million and we give her 300k... We said we will consult with you and will sort her out Friday morning... If we can let’s give her 1% or 2 % on a level of trust because she did keep her promise that she will block the money from being withdrawn.”

Matodzi replied with “go ahead...”.

So Radzilani, allegedly, went to the extent of personally managing investments to the bank. She is therefore accused of usurping the power of the municipality’s financial head, contravening the MFMA and participating in a corrupt racket that benefited her own financial position.

Both Msiza and Radzilani denied these findings by Motau and Werksmans.

The true extent of Msiza’s involvement in the VBS scam was, however, detailed in court documents filed by Motau and Werksmans in December 2018 after Msiza approached the court to have certain findings against him expunged from The Great Bank Heist report.

Before court, Msiza argued that his reputation, dignity and right to equality had been unlawfully and unfairly impugned by Motau and Werksmans’ findings.

In defence of their published findings, Motau and Werksmans attached 57 annexures to their court papers containing damning evidence in the form of emails, WhatsApp discussions, interviews under oath, bank statements and documents detailing Msiza’s wrongdoing.

Msiza disagrees with these findings.

Judgment in the matter is yet to be delivered by Judge Vivian Tlhapi in the High Court in Pretoria.

The five main themes canvassing Msiza’s pivotal role in the VBS bank heist

Much of Motau and Werksmans’ findings centres around a company named Mojovax (Pty) Ltd, co-owned by Msiza and his wife Mmabogoshi Bellah Msiza, and a company ostensibly owned by Msiza’s front Matsepe, named Moshate Investment Group (Pty) Ltd.

In his affidavit filed at the High Court in Pretoria, Msiza introduces himself as a “businessman and also the provincial treasurer of the African National Congress in the province of Limpopo”, elected to the position in June 2018. The Msizas seem to have been involved in very lucrative “business” deals. When asking for a property bond from VBS in 2016, Motau revealed, the Msiza couple claimed a cumulative net asset value of about R164-million and their investments in Mojovax a further R35-million.

1. Msiza’s R9.5-million property in Polokwane

Evidence in the form of emails shows that Msiza forwarded the deed of sale for the acquisition of a property in Polokwane in January 2017 to VBS CEO Andile Ramavhunga. The property was to be registered under the name of his company Mojovax.

Ramavhunga forwarded the documents to a VBS colleague, saying “Can you please prepare for this. It’s very important that we are diligent about this. It’s for the Limpopo treasury TG.”

Motau found that there were no supporting documents to prove the couple’s net worth, that the bond application was not proper, that the application form was left incomplete and he noted the absence of evidence supporting the claimed market value of R12-million.

The bond payments were also not regular monthly payments like payments effected by law-abiding citizens, but rather sporadic, irregular and incomplete.

2. Matsepe’s Moshate Investments Group and Msiza’s hiding hand

Motau and Werksmans’ court papers get especially interesting where it describes how Msiza’s irregular bond on the above-mentioned Polokwane property was paid off with illegal VBS “commissions” which Msiza received for coercing municipalities into illegally investing money in VBS.

In short, Motau claimed Msiza used illegal VBS money to pay off his irregular bond by participating in what may be a money-laundering scheme operated through his front, Matsepe.

This is how it happened:

Large sums of VBS money were paid between 2016 and 2018 into Matsepe’s Moshate Investments Group by several VBS-linked companies, proved by Motau to have been in the money laundering business. These payments were “commissions” for brokering deals with municipalities. (Matsepe received over R35-million in cash and benefits from VBS in this way. Motau described it as “gratuitous” payments.)

During the investigation, Matsepe made available to Motau some of his bank statements.

The investigative team’s analysis shows that Moshate paid at least R2-million in VBS money right back into Msiza’s bond, registered to Mojovax. The references on these payments were “Mojovax” and “Msiza”.

WhatsApp discussions between Matsepe and Mukhodobwane further suggest that “millions in commissions” were paid to Matsepe and that he used “some of it towards Danny’s bond”.

3. Msiza and the municipalities

VBS bank managers’ lifestyles became more exorbitant in 2017. The pay-off list consisting of auditors, attorneys, politicians and fixers who, on the one hand brought the bank lucrative deals, and on the other hand helped to keep the secret, also grew quickly. So did the black hole in the bank’s finances. The unbridled theft resulted in an insatiable need for ever larger deposits. The money from poor individual depositors, stokvels and burial trusts was no longer enough. Enter taxpayer-funded money from municipalities.

Two separate discussions between Mukhodobwane and Matsepe shine light on what transpired.

On 12 December 2017, Matsepe told Mukhodobwane: “This [municipal manager] is full of shit but Danny is intervening.”

He later stated: “Danny just dealt with Elias [Motsoaledi Municipality]. They say first thing in the morning, but its only 35m (sic).”

And on 23 February 2018, days before the bank was put under curatorship because the Reserve Bank caught wind of the theft, Matsepe said:

“Chief your behaviour is very appalling. I have been calling you since yesterday to get status of things so that we can communicate with client and keep them at ease until the situation is dealt with. You must understand that this is Danny’s political image at stake here and if it doesn’t matter to you then know what matters to him and us and we are getting to a point where we will withdraw every client that has been brought by us just to protect Danny’s image because of your behaviour.”

This discussion relates to a tiff between Matsepe and Mukhodobwane over “commissions” owed to Matsepe, while the bank had no money to pay and the Reserve Bank was breathing down the bank managers’ necks.

4. Setlafusion, the Angolan businessman and the London trip

Former VBS CEO Andile Ramavhunga testified that Msiza and Matsepe brokered a deal between VBS bank and Angolan banker and millionaire Dr Álvaro Sobrinho.

Sobrinho’s company Setlafusion invested, and ultimately lost, its R144-million deposit which was meant as part of a larger R500-million acquisition for 51% in Vele Investments.

The deal was discussed in London by a delegation that additionally also included Matodzi, Ramavhunga, Venda King Toni Mphephu and his adviser Paul Makhavhu. VBS depositors paid for the trip to London, which included expensive hotels and first-class flights. City Press wrote about it here.

5. ANC buses

Motau’s forensic investigation suggests that R703,500 was paid for the hiring of buses to transport ANC members from Limpopo to the ANC elective conference held in December 2017 at Nasrec in Johannesburg. The imaging of VBS treasurer Phophi Mukhodobwane’s computer, including his emails, contains a quotation for the buses obtained by ANC official Imtyaaz Mohamed. He copied Msiza in the email and sent it to Mukhodobwane, requesting payment.

Mukhodobwane instructed his staff at VBS: “Please debit Robvet 100329970001 account and settle the attached invoice”.

VBS-linked company Robvet, it is by now well known, was used in the VBS scam to launder money and pay for bribes and 'gifts'.

https://www.dailymaverick.co.za/article/2019-11-07-five-vbs-robbers-in-chief-r2-7-bn-gone-r800-million-more-than-previously-thought-still-zero-criminal-prosecutions/#gsc.tab=0

Where are we now?

Early on 18 June 2020, eight men were arrested and later indicted for stealing VBS bank into insolvency. This includes the arrests of Matodzi, Mukhodobwane and Ramavhunga. The eight were the main thieves, and included auditors, attorneys and banking officials who helped to keep the secret.

At a press conference, the National Prosecuting Authority stated that the second leg of investigations would focus on misdeeds at municipal level.

ANC secretary-general Ace Magashule indicated last week that Msiza and Radzilani cannot be suspended forever without formally being charged. This while Limpopo ANC veterans were reportedly worried and “shocked” about the decision to reinstate the pair.

Magashule’s own alleged link to the VBS theft through his close comrade Hantsi Matseke of the Free State Development Corporation is not to be ignored in the politics at play. Especially now that the NPA seems to have awakened from its slumber. DM