Key topics:VBS liquidator recovers nearly a third of looted R2.3bnCriminal cases continue as over R1.5bn remains missingIthala Bank faces liquidation amid separate Reserve Bank probe.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here..By Kerry Lanaghan.Nearly R730 million has been recovered from the wreckage of VBS Mutual Bank, according to the South African Reserve Bank’s Prudential Authority (PA). The figure, revealed in the PA’s latest annual report, accounts for nearly one-third of the R2.3 billion looted from the bank through widespread fraud and theft.VBS Mutual Bank, once celebrated as a financial lifeline for rural and underbanked communities in South Africa, was brought down by a massive corruption scandal. Founded to provide financial services in areas such as the Venda homeland, the bank ultimately became a vehicle for looting public funds. In 2018, advocate Terry Motau’s explosive report, The Great Bank Heist, laid bare the scandal, detailing how municipal officials, politically connected individuals, and complicit auditors orchestrated a sophisticated scheme to plunder depositor and municipal funds.Among the high-profile figures implicated in the scandal were Brian Shivambu, brother of former EFF deputy leader Floyd Shivambu; Danny Msiza, former ANC Limpopo treasurer; and Florence Radzilani, ANC Limpopo deputy chair. The scandal was described as one of the gravest betrayals of public trust in post-apartheid South Africa, with pensioners, low-income savers, and several municipalities suffering devastating financial losses.According to a report made by SowetanLIVE, the bank was placed under final liquidation in November 2018. Since then, liquidator Anoosh Rooplal has led the recovery process. In 2022, he disbursed R159 million to proven concurrent creditors, equating to 7 cents in the Rand. A second dividend of R458 million was paid in December 2023, pushing total payments to R617 million, or 27 cents in the Rand.“Collection efforts on the loan book are ongoing, with significant progress achieved to date,” the PA noted in its report. “The current focus is on securing further recoveries for the benefit of the proven creditors.”Rooplal said this week that while a timeline for the next dividend payout remains unclear, substantial distributions have already been made and the recovery process is ongoing.The PA’s report also drew attention to broader risks in the sector, highlighting the need for strong governance and risk management. PA CEO and Reserve Bank Deputy Governor Fundi Tshazibana warned that while local economic conditions are stabilising, geopolitical tensions and global financial deregulation trends continue to threaten the banking system.Separately, the PA is engaged in legal proceedings to liquidate another troubled institution, Ithala SOC Limited. In January 2025, it filed for provisional liquidation, alleging that the entity was unlawfully accepting deposits. The PA had appointed a repayment administrator to transfer these deposits to a registered bank. Still, the process has stalled due to limited cooperation from Ithala and a lack of interest from registered institutions.As legal opposition continues from Ithala and the KwaZulu-Natal provincial government, the Reserve Bank has frozen Ithala’s deposit accounts to prevent misuse of funds. Finance Minister Enoch Godongwana has since approved an R2 billion guarantee to safeguard Ithala’s 223,000 retail depositors and ensure their funds can be accessed once migrated to compliant banks.The VBS saga, now more than five years old, remains a painful chapter in South Africa’s financial history. While the recovery of nearly R730 million is a milestone, more than R1.5 billion remains unaccounted for. Dozens of criminal cases have been opened, and nine matters are currently before the courts. However, justice and full financial restitution are still a long way off for many of those affected, including municipalities and thousands of ordinary South Africans.
