Two Limpopo municipal bosses who were arrested by the Hawks on Wednesday morning in relation to the illicit investment of municipal millions with the beleaguered Venda Business Society (VBS) have been granted bail.
The two, executive mayor for the Sekhukhune district municipality, Julia Mathebe, and former Elias Motsoaledi local municipal manager, Minah Maredi, appeared in the Pretoria Crimes Court on Wednesday afternoon.
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They were each granted bail of R30,000 and their case was postponed to March 2023.
Maredi resigned from the municipality last year following “irreconcilable municipal feud” with the municipal council. Mathebe was elevated to the position of executive mayor for the Sekhukhune district municipality following her election during the last November municipal polls, beating her contender, Stan Ramaila, who was mayor of that municipality.
“The manager and the mayor faced charges of corruption, money laundering and contravention of the Municipal Finance Management Act (MFMA) as well as the Banks Act,” Hawks spokesperson, Colonel Katlego Mogale, said on Wednesday.
The arrest, according to Mogale, was a result of the ongoing investigation into the VBS Mutual Bank investments that were conducted by municipalities in contravention of the MFMA.
VBS was formed in 1982 as the Venda Building Society and it became a mutual bank in 1992. It was placed under liquidation in November 2018 and its banking license was suspended.
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According to the Hawks, the municipal manager is alleged to have been instrumental in investing the municipality’s R190 million into the VBS Mutual Bank, and also allegedly received over R300,000 in gratification.
“This included cash, accommodation and flight tickets. They were channelled through a company belonging to her children,” said Mogale.
Mayors fired over VBS investment
Eight Limpopo municipal mayors have since been fired by Limpopo Premier Stan Mathabatha, following their alleged involvement in the illicit municipal investment with the VBS Mutual Bank.
About 11 municipalities had invested more than R1.2 billion into the bank. This was in contravention of a ban by the National Treasury, which forbade public institutions such as municipalities to investment public funds into a mutual bank.
Last month, opposition parties accused Mathabatha of including VBS-tainted ANC bigwigs into his Cabinet. During his recent Cabinet reconfiguration, Mathabatha fired former education MEC Polly Boshielo and former Public Works MEC Dickson Masemola in favour of former Vhembe district municipality’s executive mayor, Florence Radzilani and former Lepelle Nkumpi local municipality mayor, Nakedi Sibanda-Kekana.
The Bolsheviks was the first to erupt into criticism, claiming the reshuffling was unfair and unjust to the poor people of Limpopo, who lost their hard-earned investments to the liquidated bank.
Following the arrest of the mayor and the manager, party general-secretary Seun Mogotji said: “The Bolsheviks welcomes the arrest of the two by the Hawks.
“This arrest may become the turning point in rooting out corruption in our municipalities. The wheel of the law may take time to grind, but finally justice will be done. Thank you the Hawks, we can now see that you are hard at work.”
But a municipal source, speaking on condition of anonymity, praised Mathebe, saying she was a rock.
“She has survived many storms before and I hope she will also survive this one. I say this because her job is to play a political leadership and not investments. Investing with VBS has municipal manager and the chief finance officer written all over their faces, and not Mathebe,” said the source.
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Both the provincial executive committee (PEC) of the ANC in Limpopo and the party’s regional leadership in the Sekhukhune region where not available for comment.
Municipal spokesperson for the Sekhukhune district municipality, Khomotjo Ndhlovu said the council had noted the arrest.
“The arrest today of the two is in relation to the alleged incident that took place in the Elias Motsoaledi local municipality. Perhaps you must engage that municipality for further comment and not Sekhukhune district,” said Ndhlovu.