The alleged rot in the numerous failed attempts to keep Limpopo’s notorious banking cartel afloat through the VBS mutual bank has led to the door of South Africa’s National Treasury.

Following his 495-year imprisonment sentence (to be served concurrently for 15 years) for a wide-ranging series of charges, including fraud and money laundering, former VBS chairperson Tshifhiwa Matodzi, 46, penned an affidavit in which he implicated various individuals and organizations.

These included municipal officials, mayors, ANC heavyweights in Limpopo, SACP leaders, EFF national leaders and former Director-General (DG) in the National Treasury, Dondo Mogajane.

If Matodzi’s wildly leaked 70-page affidavit is to be believed, Mogajane accepted a R1 million bribe to prevent the National Treasury from enforcing a decision for Limpopo municipalities to withdraw their investments in the mutual bank.

The decision was based on legal frameworks, such as the Municipal Finance Management Act (MFMA), that govern the type of banks municipalities are allowed to invest in.

The R1 million bribe, was, in fact, being viewed as a way to allow VBS and its corrupt beneficiaries to continue receiving millions from municipalities. At the same time, the bank sought to finalize its upgrade to a commercial bank.

According to the affidavit, a man named Raliom Razilwane played a key role in facilitating the R1 million bribe to Mogajane.

“To my knowledge, Raliom Razilwane was the owner of a company called Gundo Wealth. Around 2017, I learned that Gundo has been appointed as an agent for VBS to source investment deposits… By the time I met Raliom, he had already been appointed as a commission agent. He was highly experienced in the investment space and knowledgeable regarding several investment products that VBS was not even offering yet.

“He knew many influential people within the investment space including the then DG of National Treasury, Mr. Dondo Mogajane, with whom he had a close relationship. Around August 2027, VBS started receiving enquiries from municipalities regarding communication from National Treasury, which was informing them (municipalities) to withdraw their investments from VBS since the MFMA prohibits any such investments with a mutual bank, of which VBS was,” said Matodzi, under oath.

This is where meetings with Mogajane followed, as a doomed strategy to allow the municipalities to keep their millions in VBS. Before his appointment as DG, Mogajane held various positions within the National Treasury, including Deputy Director-General and Chief Director.

He has also served on several boards and committees, including the South African Revenue Service (SARS) and the Public Investment Corporation (PIC).

“To my recollection, I had at least five meetings with Dondo. One of those took place at Pedro-Portia Cigar Lounge at Cedar Square in Fourways. The other meeting took place at VBS offices in Rivonia whilst the third meeting took place at Eagle Canyon on 8 October 2017. The other meetings we had [at] Treasury and the Reserve Bank. In all these five meetings, it was never just me and Dondo but one or two other people,” he said.

Matodzi placed two other role players at the meeting, whom he referred to as Chuma and Dr. Philile Mkhize. From his affidavit, it is clear that the environment was filled with mistrust, evidenced by the use of whispering into ears, handwritten notes, and head nodding to agree to the bribery amount.

“While the discussion was still on this National Treasury letter to municipalities, Raliom then softly whispered to me regarding our earlier agreement that I should pay an amount of R1 million to Dondo. That is when Raliom shared a whisper with Dondo and then Dondo said a million rand is fine, nodding his head. In short, the purpose of this meeting was none other than to confirm the payment of R1 million and the bank account where it was to be made.

“I then enquired from where this payment was to be made and that is when Raliom received a piece of paper from Dr. Mkhize and in turn handed that piece of paper to me. On that paper we’re the banking details. I then enquired if these were the banking details into which I was to make that R1 million payment. That will be when Dondo said yes, nodding his head. I left the meeting and the four of them remained,” Motodzi wrote.

According to the affidavit, the money was later deposited into a Standard Bank account number belonging to Baphilile Foundation NPC, which Dr. Mkhize, who attended the meeting, controlled.

“The payment was intended for Dondo to intervene and to facilitate the withdrawal of the National Treasury letter and to grant VBS the special dispensation of 18 months for it to continue to accept the municipal investments. At the time, VBS had already started the process to convert into a commercial bank and in VBS view, the envisaged 18 months would have been sufficient for the purpose to be expedited,” Matodzi wrote.

The affidavit has sent the proverbial cat among the pigeons, with high-profile individuals and organizations coming out to distance themselves from the allegations. Mogajane, who is now chief executive of private multi-billion rand investment holding company, Moti Group, is no exception.

In a media statement, Mogajane refuted Matodzi’s corruption allegations. Instead, Mogajane claims that he was instrumental in stopping Matodzi and VBS from engaging in illegal activities.

Mogajane confirmed meeting Matodzi but denied ever receiving bribes. He emphasized his clean record in public service.

“I met with Matodzi several times during my tenure. These meetings followed a circular issued by National Treasury in August 2017 warning municipalities that deposits made at a mutual bank contravened municipal finance regulations, and were not allowed. Matodzi sought to have the circular withdrawn. But each time, I gave him the same answer, refusing to withdraw the circular, and refusing his requests to allow VBS to conduct any further investment deals with municipalities.

“Matodzi’s affidavit conveniently excludes the many meetings held in the presence of other people, including with VBS management, the PIC as a VBS shareholder, the South African Reserve Bank (SARB), and other National Treasury representatives. As can be evidenced by minutes of these meetings, we made it very clear that legally, VBS Mutual Bank was not allowed to continue conducting investment deals or receiving deposits from municipalities,” said Mogajane.

Mogajane added that he kept meeting with Matodzi not to discuss any bribe but to put heads together on how VBS could be converted into a commercial bank.

“During these discussions in 2017 and early 2018, we were not aware that VBS was essentially a scam, and simply viewed these as engagements with a black-owned bank. I categorically deny that I have ever received corrupt monies or bribes.

“As evidence of the stance that both myself and National Treasury took against Matodzi and VBS, all filed affidavits, statements, minutes of meetings, circulars, and general records dating as far back as 2017, are with the relevant authorities. I will not be trialed by corrupt individuals or those driving their own agendas, and I will not allow anyone to tarnish my name,” Mogajane said.

The National Treasury said it would not entertain Matodzi’s affidavit until it has been tested in court.

“The National Treasury welcomes the conviction and sentencing of Mr Tshifhiwa Matodzi, former Chairperson of VBS Mutual Bank, and kingpin behind the looting of funds, for his role in its collapse. The corruption, money laundering, manipulation and theft of citizens’ hard-earned money that led to the eventual and regrettable collapse of VBS Mutual Bank is a blight on our financial system. “In the last few days, there have been various media reports regarding the sworn statement of Mr Matodzi wherein he makes allegations of impropriety against Mr Dondo Mogajane, a former Director-General of the department. We note that the veracity of the allegations against Mr. Dondo Mogajane have not yet been proven nor tested in any court. The concrete steps that the National Treasury took since 2016 to end unlawful investments made by municipalities into VBS Mutual Bank should speak for themselves,” said the National Treasury in a statement.

Attempts to contact Razilwane were unsuccessful.

In his affidavit, Matodzi has also disclosed damning information about the EFF and Sgameka, a company owned by Brian Shivambu, the younger brother of the EFF’s deputy president, Floyd Shivambu. He implicated Floyd Shivambu and EFF President Julius Malema in the VBS fraud and money laundering, saying they negotiated a bribe with him.

The convict alleged that he provided the EFF with “donations” that were, in reality, bribes aimed at suppressing their criticism of VBS’s loan to former president Jacob Zuma for the construction of his Nkandla residence.

IMPLICATED: In his affidavit, Tshifhiwa Matodzi claims he paid a R16 million bride to EFF leader Julius Malema and his deputy Floyd Shivambu to buy their silence over the VBS scandal. He stated that he donated a R5 million lump sum and made R1 million monthly payments to a company called Sgameka, on Floyd Shivambu’s insistence. (Photo: EFF).

“The company (Sgameka) was provided to me by Floyd to make payments that I promised to the EFF. I made this promise following the news which had broken in the media that VBS had granted former President Jacob Zuma a home loan for his Nkandla residence [and] negative publicity arose in the country, particularly from those that were opposed to Zuma at the time. Amongst those was the EFF,” wrote Matodzi.

However, Matodzi made it clear that approached the pair himself through public relations consultants, which arranged a meeting at the EFF penthouse in Sandton around April/May 2017.

“I went there alone. Present was Julius Malemaz Floyd Shivambu and Marshall Dlamini. Marshall Dlamini did not participate in the meeting, and he was seated far from where the engagement took place. I explained VBS’ position and the fact that the EFF’s negative commentary about [the] VBS/Zuma transaction was damaging VBS reputation. Furthermore, I explained that as black brothers, the EFF’s constituencies were VBS target market also. I further informed them that VBS was willing to offer a donation to the EFF.

“I then proposed that VBS can donate R5 million immediately once a bank account has benefits opened at VBS and R1 million per month to the EFF. I also made it clear that the amount could only be deposited into a VBS account, and that the EFF should therefore open a bank account with VBS. After I left the meeting Floyd and I remained in contact. At some stage, Floyd indicated that they have opened an account at VBS in the name of a company called Sgameka. A transfer of R5 million as promised was made on my instructions from Malibongwe to Sgameka on 8 June 2017,” Matodzi wrote.

He added that he subsequently paid R1 million monthly from his holding company, Vele or its subsidiaries, into the Sgameka VBS account.

“Myself, Julius and Floyd understood the concept of donation to mean gratification,” he said.

In response, EFF leader Julius Malema, together with his deputy, have denied any illegality, asserting that their hands were clean. Malema responded to Matodzi’s allegations during a Progressive Caucus media briefing in Parliament on Thursday, July 18.

He accused the media of selective reporting and targeting EFF leaders when ANC and SACP leaders were the real looters who benefitted from the bank’s collapse. Unlike SACP and ANC leaders, including former ANC national treasurer Zweli Mkhize and former Polokwane mayor Thembi Nkadimeng, EFF leaders neither requested donations nor illegally deposited municipal monies into the bank, Malema added.

“The communist party requested the money. The ANC requested the money. Zweli Mkhize gave an account of a different company. There, they implicate them directly and say, they requested and even told us where to pay. The EFF did not request. If anything, we offered to donate. But those that are recipients of such donations, which we dispute, are now being attacked as if they are the ones who went to solicit a bribe,” Malema insisted.

“The ANC in Limpopo, the biggest beneficiary of VBS because they sent their municipalities to go and put money in VBS in exchange for gratuity. Again, Polokwane municipality put money in VBS. None of you has asked the question [of] who was the mayor when Polokwane was putting money in VBS. The mayor was Minister of Justice at that time.”