Five years on: VBS shareholders still waiting to recover their money

The collapse of VBS Mutual Bank in 2018 marked one of South Africa’s most notorious financial scandals. Nearly R2 billion was looted from the institution, leading to its insolvency and liquidation by 2019. Despite the passage of five years, minority shareholders have yet to see any recovery of their investments.

VBS Mutual Bank’s downfall left roughly 20,000 creditors and depositors stranded, many losing life savings and investments. Among the shareholders is Madambi Muvhulawa, representing over 200 minority investors, who has sought intervention through the Public Protector. They are pressing Treasury and the Reserve Bank to acknowledge their roles in the bank’s collapse and to help facilitate the return of lost funds. Muvhulawa expressed hope that success in this process would mean money returned not only to shareholders but to all affected parties.

The human impact of VBS’s demise extends beyond formal shareholders. A group of women fish sellers along the Punda Maria road in Thohoyandou, who had invested their modest savings at the bank, voiced a plea for the government to revive the institution. Their livelihoods were directly affected, with some even grieving family members who lost their investments in the scandal. These small-scale investors depend on such institutions for security and the opportunity to grow their earnings—opportunities that vanished with VBS.

Legal proceedings linked to the scandal continue to unfold. Recently, three individuals—including two former senior officials from Lepelle-Nkumpi Local Municipality and a businessman—appeared in the Polokwane Special Commercial Court. They face charges of corruption, fraud, theft, and breaches of the Municipal Finance Management Act for their roles in orchestrating a R150 million municipal investment into the doomed bank in exchange for illicit payments. These proceedings serve as a reminder of the intricate web of mismanagement and deceit that precipitated the bank’s collapse.

As the case drags on, the lingering question remains: when will those affected by the VBS debacle, particularly the minority shareholders and small investors, finally receive justice and compensation for their losses? Until then, the scars of this financial disaster continue to affect thousands, underscoring the vital need for stronger oversight and accountability in South Africa’s banking sector.