Case study Copied from: Business Day Former KPMG partner admits guilt in hiding VBS loans Malaba failed to disclose loans held with VBS, which was placed in curatorship in March and is the subject of a Reserve Bank-instituted forensic investigation. KPMG employees were required to disclose where they held loans with financial institutions in line with company policy. - VBS was formed as Venda Building Society in 1982, and became a mutual bank in 1992. By 2016, the bank reportedly had about 30,000 depositors and deposits in the bank totalled R800m. In 2018, VBS was declared insolvent and bankrupt with SA citizens and taxpayers defrauded out of roughly R2bn and placed under curatorship. 04 DECEMBER 2023 - 21 : 05 by KGAUGELO MASWENENG A Reserve Bank report compiled on its behalf by advocate Terry Motau found that the bank conducted business in a fraudulent and reckless manner, resulting in the widespread impoverishment of its depositors to the benefit of its senior managers, politicians and some board members. During the Irba hearing, it was revealed that during 2016 and 2017 VBS was an audit client of KPMG. Malaba was a member of its VBS audit team and also the engagement partner. “During March 2016, Tshuma and Malaba, on behalf of Betanologix, applied for and were granted a facility by VBS. The facility was not made under normal lending procedures: there were no repayments on the Betanologix facility since the account was opened, the facility increased regularly and resulted in an outstanding amount of R9.6m by February 28 2018 (days before VBS was put in curatorship),” according to the settlement document. When Tshuma was asked to provide clarity to the firm, he denied the existence of such an arrangement with VBS, that Betanologix was his company and that he operated a property business. He also denied a withdrawal of R200,000 was for himself, saying it was on behalf of his wife who did not have her own bank account. Several transactions were made in the bank account on his and Malaba’s behalf. Irba fined Tshuma R200,000. What is the name of the bank?
