We often write about shots being fired in broad daylight as cash-in-transit vans are pounced upon by criminals, but the scale of those heists pales into insignificance when compared to the trail of destruction left by the VBS Mutual Bank heist.

If you want to know how the plundering came to be, check out Bloomberg’s account of South Africa’s biggest bank heist, which “took place without a single shot being fired”.

For a sense of scale, if you add up 2017’s 10 biggest cash-in-transit heists, they total R456 million. The theft from VBS Mutual Bank? A cool R1,5 billion, perpetrated by five bankers.

Here’s more from that report:

VBS’s history stretches back to 1982, when racist laws were in full force and black South Africans had little or no access to finance. Burial societies established the Venda Building Society to offer impoverished communities a way to set aside money for funerals.

The bank shot to prominence in 2016, when it loaned former President Jacob Zuma almost 8 million rand to reimburse taxpayer money spent on upgrades to his private home…

South Africa’s biggest lenders reacted to the corruption allegations by closing down all accounts linked to the Guptas. That triggered a backlash, with Zuma’s supporters calling for a boycott of what they labeled “white banks.” Municipalities came under pressure from some politicians to instead place their money with black-owned banks like VBS…

It’s safe to say those municipalities who succumbed to that political pressure are now regretting their actions. The bank went into administration back in March, after their inability to honour an obligation to a municipality the month before.

Basically, it was a giant Ponzi scheme:

“It took deposits, gave the money to directors and shareholders and their associates and companies, and then it needed to pay back deposits so it had to get more deposits in,” [Kuben Naidoo, the registrar of banks] said, describing the structure of the Ponzi scheme.

An investigation by SizweNtsalubaGobodo, the administrator, blamed VBS Chairman Tshifhiwa Matodzi [below] and four others for the bank’s collapse. They defrauded depositors by fabricating accounts, creating fictitious deposits, bribing officials at other organizations, transferring funds to themselves and buying bank assets that weren’t recorded, including a helicopter, according to Anoosh Rooplal, the bank’s curator.

Matodzi isn’t the type of person to take it on the chin, though, and had a familiar rebuke to the allegations:

Matodzi said in a signed letter to Naidoo in March, which Naidoo included in court papers, that his VBS team would “leave the space with our heads held high knowing that we achieved what was considered impossible. In the end, we were faced with a well organized and powerful system which does not tolerate growing black banks and black excellence.”

The thousands of everyday South Africans who lost their life savings would disagree:

…Terrence Mulaudzi, 23, hustles through the streets of the town, selling everything he can — from belts to mobile-phone SIM cards — to eke out an existence. His extended family has been a victim of the bank’s collapse.

“Everyone in my family is affected, from my dad to my cousins,” he said. “We trusted the bank and the system to look after us, and now to discover we have been throwing money into a bottomless pit and for thieves to enjoy.”

…Mulalo Ramano [is] a 72-year-old widow who’s suffered anxiety attacks fretting about the 20,000-rand life savings she deposited at the bank.

“My heart beats so so fast, it feels like it’s going to pop out,” a frail Ramano said July 14 as she waited outside a branch of VBS in Thohoyandou in northeastern South Africa. She was among dozens of people lined up to trying to get their money back from the lender…

Mulalo and Terrence left to suffer, whilst the fat cats at the top deny any accountability for a crisis created by their reckless plundering.

A tale as old as time.

[source:bloomberg]