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‘Pay back R20 mil’ – EFF motion for return of interest on Polokwane muni’s VBS investment


The Economic Freedom Fighters (EFF) is expected to take its “Pay back the money” refrain to a chamber of the coalface of service delivery with a motion for the return of R20 million – reportedly incurred in interest on Polokwane Municipality’s investment with VBS Mutual Bank – to the South African Reserve Bank (SARB). The issue is supposed to serve on the agenda of a two-day meeting of Polokwane City Council that commenced yesterday (Wednesday).
In local EFF ranks the motion, intended for tabling by the party for debate during the continuation of the council meeting today (Thursday), is perceived to receive a thumbs up from opposition parties represented in the council. And secretly so from the ruling African National Congress (ANC).
Polokwane Observer is privy to a copy of the letter that constitutes the content of the motion, sent to the Speaker of the Council by EFF Chief Whip in the Polokwane Council, Freddy Ramaphakela last Thursday.
With the intended motion the EFF is expected to draw attention to the fact that the withdrawal of the investment on its maturity didn’t make it lawful and justified. For that reason the EFF would make three recommendations, including that all interests incurred between the date of investment and the withdrawal thereof be returned to the SARB within seven days of a suggested council resolution. Other than that the EFF would further recommend that the municipal officials involved in the violation of the Municipal Finance Management Act (MFMA) be charged with violating applicable legislation and be suspended with immediate effect.
Ahead of the council meeting Ramaphakela informed Polokwane Observer that Polokwane Municipality’s investment with VBS Mutual Bank totalled R349 million, accruing cumulative interest of R20 million. During today’s council session the EFF is expected to move for the interest to be returned to the SARB in order for the amount to be paid out to clients of VBS Mutual Bank.
To a question relating to possible concerns on the side of the city’s ratepayers about such a resolution, Ramaphakela responded by saying they should be conscious of the fact that the money was allegedly accrued fraudulently and that Polokwane Municipality seemingly got unlawful interest on their investment. “We can’t keep money acquired unlawfully.”
According to Ramaphakela the point on the agenda of the council meeting was expected to be dealt with only today, due to the council’s lengthy agenda.
An expert on local governance issues who was approached by Polokwane Observer for an opinion on the matter indicated that VBS Mutual Bank is under liquidation and that all funds paid out by the bank before the liquidation will be scrutinised. “If found to be irregular, it will be recovered by the liquidator for distribution among creditors.”
A voice message left on the phone of Polokwane Municipal spokesperson Matshidiso Mothapo went unanswered.