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South Africa opposition dismisses bank fraud claims

Tuesday October 16 2018
Malema

South Africa's Economic Freedom Fighters (EFF) party leader Julius Malema. FILE | NATION MEDIA GROUP

By AFP

South Africa's opposition Economic Freedom Fighters (EFF) party said on Tuesday that fraud claims against a top leader were politically motivated to discredit it ahead of crunch polls in 2019.

The far-left EFF, led by Julius Malema, is embroiled in a row raging around the collapse of the VBS Mutual bank which has particularly hit poor and rural clients.

A central bank probe into the failure said $130 million was stolen over three years and named EFF deputy president Floyd Shivambu's brother as a beneficiary.

The report, titled The Great Bank Heist, described the bank as "corrupt and rotten to the core".

It implicated 52 other individuals as well as Mr Brian Shivambu, who is an active member of the EFF, South Africa's second largest opposition party in parliament.

The scandal

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Mr Malema, whose party has put fighting corruption at the forefront of its pitch to voters, distanced the EFF from the scandal in a two-hour media briefing at the party HQ in Johannesburg.

"The EFF has not been mentioned in any wrongdoing," said Malema, accusing the local media of seeking to undermine the party.

"Its intention is to discredit the EFF and make sure the EFF loses support in the 2019 election."

The VBS collapse is one of the most serious graft cases to rock South Africa since the departure of former president Jacob Zuma whose alleged corruption was vigorously condemned by the EFF.

The party, founded in 2013 after former Zuma ally Malema fell out with the then-president, has waged a vocal campaign against official corruption.

My account

Mr Shivambu denied ever receiving any cash from his brother for himself or the party.

"We never took money from VBS and anyone who thinks we did is mad," said Mr Floyd Shivambu.

"There has never been any 10 million rand ($700,000) that came into my account... it's deliberate, part of the propaganda machinery, it's pure insanity -- it's madness."

His brother Brian, 30, has also rejected the findings and threatened to sue.

The investigation into the bank was launched after VBS suffered a severe liquidity crisis and the bank collapsed into administration earlier this year.

The probe also revealed malpractice, including the supply of overdrafts to well-connected clients and payments made to individuals in exchange for deposits from state-owned companies.

Forced to resign

VBS Mutual gained notoriety in 2016 when it lent scandal-tainted former president Zuma $540,000 to repay taxpayers for upgrades he made to his private home.

By 2017 the black-owned bank had 30,000 clients and deposits worth $55 million, according to local media.

Initially operating as Venda Building Society, VBS was founded in 1982 in the former Venda Bantustan, a homeland created by the apartheid regime to exclude blacks from South Africa's political system.

On Monday Venda king Toni Ramabulana, whose household holds a stake in VBS, said he would return any money that proved to be the "proceeds of illegalities".

President Cyril Ramaphosa, who took over after Zuma was forced to resign in February, on Monday denied accusations that he was forewarned about the looming crisis while he was still deputy president.

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