Poor South African savers ruined by bank collapse

“As treasurer of my stokvel, I had to go to the bank almost every day to find out what is happening,” said Annah Muambadzi, 65, of the panic that gripped her savings club.

Fear spread through poor rural communities across South Africa in November when VBS, a regional bank that catered to poorer customers, collapsed.

It came as Muambadzi’s son was about to get married, and university fees were due for another child.

“The ladies started looking at me suspiciously thinking I had stolen the money,” she said of her savings club, known as a stokvel, into which members contribute an agreed amount each month.

The bank was left in ruins after 53 people stole $130 million deposited by individuals like Muambadzi and her club.

One of those implicated was the brother of Floyd Shivambu, a prominent leader of the radical Economic Freedom Fighters (EFF) party which has campaigned against corruption.

VBS was founded in 1982 at the height of apartheid in the Venda homeland, an area of modern-day Limpopo province reserved by white authorities for black communities.

Its collapse, after the High Court ordered it be liquidated, became one of the most serious corruption scandals to rock post-apartheid South Africa —largely because so many victims were poor, black and female.

South Africa’s central bank was forced to step in and guaranteed $7,300 per retail depositor through a competing bank.

More than 17,000 people flocked to open accounts according to the rescuer, Nedbank.

But those with savings above the threshold face losing the difference.

Retired university lecturer and minority shareholder professor Elwani Khuba, 81, said she saved at the bank because it promised to guarantee her future.

 “We used to get dividends… we were happy that VBS was working well,” Khuba told AFP.

Now, “I’m still waiting to get my money and the value of my shares.”

Khuba had hoped “to give this legacy to my children and also to my grandchildren.

“It was so heart-wrenching, we didn’t know what to do,” she said.

Local investigative journalists reported on executives purchasing luxury cars and chartering helicopters with the bank’s money.

The central bank in October published a 148-page report titled “The Great Bank Heist” that laid bare the greed of those who plundered the bank.

“These were criminals similar to bank robbers, the only difference was that they carried suitcases and they wore fancy Armani suits,” said administrator Anoosh Rooplal.

Four months after the bank collapsed, officials told the news agency that asset recoveries will depend “on the success of the liquidation process”.

 

Poor South African savers ruined by bank collapse

As treasurer of my stokvel, I had to go to the bank almost every day to find out what is happening, said Annah Muambadzi, 65, of the panic that gripped her savings club. Fear spread through poor rural communities across South Africa in November when VBS, a regional bank that catered to poorer customers, collapsed. It came as Muambadzis son was about to get married, and university fees were due for another child. The ladies started looking at me suspiciously thinking I had stolen the money, she said of her savings club, known as a stokvel, into which members contribute an agreed amount each month. The bank was left in ruins after 53 people stole $130 million deposited by individuals like Muambadzi and her club. One of those implicated was the brother of Floyd Shivambu, a prominent leader of the radical Economic Freedom Fighters (EFF) party which has campaigned against corruption. VBS was founded in 1982 at the height of apartheid in the Venda homeland, an area of modern-day Limpopo province reserved by white authorities for black communities. Its collapse, after the High Court ordered it be liquidated, became one of the most serious corruption scandals to rock post-apartheid South Africa largely because so many victims were poor, black and female. South Africas central bank was forced to step in and guaranteed $7,300 per retail depositor through a competing bank. More than 17,000 people flocked to open accounts according to the rescuer, Nedbank. But those with savings above the threshold face losing the difference. Retired university lecturer and minority shareholder professor Elwani Khuba, 81, said she saved at the bank because it promised to guarantee her future. We used to get dividends we were happy that VBS was working well, Khuba told AFP. Now, Im still waiting to get my money and the value of my shares. Khuba had hoped to give this legacy to my children and also to my grandchildren. It was so heart-wrenching, we didnt know what to do, she said. Local investigative journalists reported on executives purchasing luxury cars and chartering helicopters with the banks money. The central bank in October published a 148-page report titled The Great Bank Heist that laid bare the greed of those who plundered the bank. These were criminals similar to bank robbers, the only difference was that they carried suitcases and they wore fancy Armani suits, said administrator Anoosh Rooplal. Four months after the bank collapsed, officials told the news agency that asset recoveries will depend on the success of the liquidation process.