Former Elias Motsoaledi Local Municipality mayor and municipal manager, Julia Mathebe and Minah Maredi, were granted bail on Wednesday following their arrests and subsequent court appearance relating to a R190 million deal linked to corruption-ridden VBS Mutual Bank.
Both Mathebe and Maredi were granted bail of R30 000 each and their case was postponed to 2 March 2023.
Elias Motsoaledi Local Municipality, part of the Sekhukhune District Municipality in Limpopo, invested R190 million in VBS Mutual Bank in 2014.
On Wednesday, Mathebe – who is now mayor of the Sekhukhune District Municipality – appeared in the Pretoria Specialised Commercial Crimes Court, alongside Maredi.
The pair were arrested in Groblersdal earlier in the day and, according to Colonel Katlego Mogale of the Hawks, face charges of corruption, money laundering and contraventions of the Municipal Finance Management Act and the Banks Act.
The arrests are the result of an ongoing probe into municipal investments made into the now defunct bank, which was declared insolvent in 2018 and subsequently placed under curatorship.
According to South Africa’s Municipal Investment Regulations, municipalities are prohibited from undertaking investments with mutual banks.
The regulations only allow municipalities to invest funds in investment type-deposits with commercial banks. Nevertheless, the former Elias Motsoaledi municipal officials invested R190 million worth of municipal funds into VBS.
In charges laid by the state, it is alleged that Maredi (as municipal manager at the time) played an instrumental role in the deal, with former mayor Mathebe receiving more than R300 000 in cash, accommodation and airfares, all of which were channelled through a company owned by her children.
According to The Great Bank Heist, Advocate Terry Motau’s report to the Prudential Authority, VBS received over R3.4 billion from municipalities over the period between January 2015 to 2018, when the bank was placed under curatorship.
The bank, in turn, made payments to municipalities of just over R2.3 billion, the report found.
The arrests also come weeks after the Pretoria High Court dismissed VBS accused and political fixer Kabelo Matsepe’s plea to have the banking regulation declared unlawful.
Earlier this year, Matsepe challenged the validity of the Municipal Investment Regulations, which restrict municipalities from investing in mutual banks.