TWO ANC leaders facing criminal charges for their roles in VBS Mutual Bank’s looting have lost their legal challenges to the findings of the high-level investigation into the affairs of the now-defunct financial institution.
The North Gauteng High Court judgment was in favour of controversial former ANC Limpopo provincial treasurer Danny Msiza reviewing and setting aside adverse findings, remarks and conclusions contained in five paragraphs of advocate Terry Motau’s “The Great Bank Heist” report on VBS looting has now been overturned.
In August 2020, Judge Vivian Tlhapi declared Motau’s failure to afford Msiza the right to procedural fairness (listening to the other side) prior to the release of the report unlawful and unconstitutional.
Judge Tlhapi also found that Motau violated the ANC Limpopo strongman’s right in terms of section 34 of the Constitution, which states that everyone has the right to have any dispute resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.
However, the SA Reserve Bank’s (SARB) Prudential Authority, which commissioned Motau’s probe, appealed against the ruling and last month North Gauteng High Court Judge Jan Swanepoel upheld the central bank’s appeal and substituted Judge Tlhapi’s order with one stating that Msiza’s application had been dismissed with costs.
Judge Swanepoel found that Motau’s failure to afford Msiza an opportunity to be heard was not irrational and thus passed the test under the issue of legality.
”Insofar as it may be found that the first respondent (Msiza) is prejudiced by the impugned portions of the report to the extent that the report is reviewable under the principle of legality, in my view the fact that the investigator (Motau) did not interview first respondent and/or afforded the first respondent an opportunity to ‘state his case’ do not render the references to the first respondent in the report as irrational,” reads Judge Swanepoel’s ruling.
In another matter, ex-ANC Youth League leader in Limpopo, Kabelo John Matsepe, and one of his companies, Moshate Investment Group, were also unsuccessful in a separate lawsuit against Finance Minister Enoch Godongwana, his co-operative governance and traditional affairs counterpart Thembi Nkadimeng, National Director of Public Prosecution Shamila Bathohi and the SA Local Government Association in the same court.
Matsepe, who was finally sequestrated late last year after failing to pay the SA Revenue Service about R61.5 million, suffered another blow early this month when the high court upheld its previous dismissal of his application to quash his VBS-related criminal charges.
He was identified as the middleman facilitating a number of municipalities to wrongfully invest ratepayers’ funds with VBS.
Matsepe together with several co-accused faces close to 200 fraud, theft, money laundering and racketeering charges in connection with the scandal.
The dismissal of Matsepe’s application for leave to appeal has paved the way for the main trial to start next month.
“There are no further applications outstanding. The matter is in the Pretoria High Court again on 14 June, 2023 and will then be postponed to 17 July, 2023 for the trial to start,” said National Prosecuting Authority (NPA) spokesperson Lumka Mahanjana.
Asked if Matsepe would take further steps to get the charges against him dismissed before the trial, his lawyer, Lufuno Mathivha of Maluks Attorneys & Corporate Law Advisors declined to comment, saying:“That is privileged information.”
“All my instructions and discussions with my client are privileged information and in terms of the Legal Practice Council I cannot discuss them,” he said.
Mathivha referred the Sunday Independent to Matsepe for answers but declined to provide his contact details.
In an attempt to escape criminal prosecution, Matsepe and his company approached the high court seeking to dismiss charges that he had violated regulation 6(c) of section 13 of the Municipal Finance Management Act, which prohibits municipalities from investing in mutual banks, by operating as a middleman in facilitating municipalities to invest their funds with VBS.
His case was dismissed in November.
In 2021, suspended Public Protector Busisiwe Mkhwebane revealed that 14 municipalities in Limpopo, North West and Gauteng had invested about R1.6 billion with VBS.
Mahanjana said the main matter in which Matsepe was one of the accused was enrolled after its investigation was completed.
“In so far as the municipalities are concerned the NPA has already enrolled six cases in respect of seven municipalities, with a further 13 municipalities under investigation,” she said.
Matsepe had contended that the court had made many errors in its dismissal of his application last year, including that he did not have a right to a collateral challenge in respect of the legality of Regulation 6(c) of the Municipal Investment Regulations.
In dismissing the application for leave to appeal, Judge Mamoloko Kubushi said after assessing Matsepe and his company’s arguments, the court could not find reasonable prospects of success on appeal.
“The third respondent (Bathohi) is opposing this application on the grounds that the definition of the charges that the first applicant (Matsepe) faced in the criminal trial do not include regulation 6(c) as an element and none of the charges in the indictment are so framed as being predicated upon the legality or otherwise of Regulation 6(c),” reads the judgment.
Among Matsepe’s co-accused are Msiza, Robert Madzonga, Ralliom Razwinane, Takunda Mucheke and Tshianeo Madadzhe.
In another VBS-related matter before the court, husband-and-wife Itumeleng Mafoko and Mabuyi Memela are heading to the Supreme Court of Appeal (SCA) to challenge the February 2023 ruling by South Gauteng High Court Judge Avrille Maier-Frawley ordering them to pay R100m to VBS including interest dating back to November 2019.
The couple, through Leratadima Marketing Solutions – of which they are both shareholders and directors – signed surety for a loan to fulfil its obligations after being awarded a contract to manufacture, supply and deliver 500 000 digital terrestrial television set-top boxes by the Universal Service and Access Agency.
Last week, Judge Maier-Frawley said although she was not left with any measure of certainty that there exists any reasonable prospect of success on appeal, Mafoko and Memela’s lawyers made a compelling argument for leave to appeal to the SCA to be granted.