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At its meeting this morning, the Standing Committee on Finance welcomed the release of Adv Terry Motau’s report on VBS Mutual Bank which was commissioned by the South African Reserve Bank’s (SARB’s) Prudential Authority.
 
The committee expressed its outrage at the plunder of VBS Mutual Bank and urged the Hawks and the National Prosecuting Authority (NPA) to act swiftly and decisively against those alleged to be responsible for wrongdoing.
 
“Without interfering with the internal investigations of the Hawks and NPA and consistent with our oversight role, we will call on the Hawks and NPA to report on progress in this regard,” said Mr Yunus Carrim, Chairperson of the committee.
 
The committee is caught up with the Budget Recommendation Report and Tax Bills this week as well as the Medium Term Budget Policy Statement in the coming two weeks. It will immediately after that consider the VBS Report on 7 November 2018.
 
Mr Carrim said the meeting will include the SARB, Adv Motau, the National Treasury, the Financial Sector Conduct Authority, the Hawks, the NPA, the Independent Regulatory Board for Auditors (IRBA) and the South African Institute of Chartered Accountants (Saica).
 
“Once again KPMG is accused of wrongdoing and we urge the Independent Regulatory Board for Auditors to complete its investigation into their conduct expeditiously. We also urge the South African Institute of Chartered Accountants to not be lame and act decisively,” said Mr Carrim.
 
He said the collapse of VBS is a major setback for diversity and transformation in the financial sector, reiterating that until the committee is convinced otherwise, its view remains that every attempt should be made to rescue VBS under a new effective leadership.
 
The committee has also expressed a concern that innocent employees at VBS Mutual, not accused of being part of the plunder, have lost their jobs and requested other banks to prioritise them in filling in vacancies they have.
 
“We need to learn the lessons from the collapse of VBS Mutual Bank to reduce the prospects of this happening in other financial institutions in future. Consideration needs to be given to an inquiry into whether SARB, National Treasury, the Department of Cooperative Governance and Traditional Affairs, the South African Local Government Association and other relevant organs of state could have acted sooner on VBS and reduced the extent of its failures,” Mr Carrim said.
 
He explained further, saying that with the implementation of the Financial Sector Regulation Act from 1 April this year, the new Prudential Authority has greater powers to subpoena witnesses and access information to investigate allegations of wrongdoing by financial institutions.
 
The committee strongly believes that these greater powers will serve the interests of depositors and policy holders, especially the lower income depositors and policy holders who disproportionately lose out the most when financial institutions collapse.
 

Issued By The Parliamentary Communication Services On Behalf Of The Chairperson Of The Standing Committee On Finance, Mr Yunus Carrim.