Eadie Makamu, the former chief financial officer (CFO) of Collins Chabane Municipality, was convicted on Wednesday for his role in the VBS Mutual Bank collapse.
The VBS scandal is a major financial scandal in South Africa that came to light in 2018. It led to the collapse of VBS Mutual Bank due to widespread fraud and corruption.
Bank executives, politicians, and related individuals systematically looted almost R2 billion from the bank through fraudulent loans, inflated salaries and illicit transfers.
The Pretoria High Court found Makamu guilty of violating the Municipal Finance Management Act by illegally investing R120 million in the bank.
Makamu was sentenced to a five-year suspended prison sentence and ordered to pay R150 000 in restitution to the VBS Liquidator. This payment aims to partially compensate victims of the bank's collapse.
The municipality lost most of its investment, with over R123 million still outstanding. Investigations revealed that some funds were used to pay commissions to attract further deposits from municipalities.
Makamu was arrested in May 2022. His co-accused, Charlotte Ngobeni, will face trial in January 2025.
This conviction is part of ongoing efforts to hold those responsible for the VBS collapse accountable. The Hawks, South Africa's Directorate for Priority Crime Investigation, said it remains committed to pursuing justice and recovering public funds.
"The efforts by the investigation and prosecution teams continue to bear fruit," said Lieutenant General Godfrey Lebeya, the National Head of the Hawks. "We have made 35 arrests and secured 6 convictions since the investigation began."
Earlier this month Johannes Mohlala, the former municipal manager of Fetakgomo-Tubatse local municipality, was sentenced by the Pretoria High Court for his involvement in the VBS Mutual Bank scandal.
Mohlala (60) received a five-year prison sentence, which was suspended for five years on the condition that he does not commit a similar offence during this period. Additionally, Mohlala was ordered to pay R100 000 to the Curator of VBS.
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