Windhoek-The South African Reserve Bank two weeks ago subpoenaed all South African banks and financial institutions that have transacted with SME Bank in Namibia to confirm what SME Bank’s funds are still on their books, if any.
The move apparently irritate VBS Mutual Bank executives, who felt the subpoena was painting VBS in a bad light, especially given that the bank has already disinvested all N$70 million it had from SME Bank, including the N$37 million investments it deposited directly into SME Bank’s bank account.
VBS Mutual Bank questions why the other South African financial institutions who transacted with SME Bank are not being made to account for N$120 million in investments.
“We feel there is a deliberate attempt to create an impression that the money was lost at VBS, whereas it is with asset managers and other big banks in Namibia,” VBS Mutual Bank chief executive officer Andile Ramavhunga told New Era.
Ramavhunga last week showed New Era the latest Factual Finding Report by South African auditing firm KPMG, dated June 7.
He also availed his bank’s transaction reports as proof that SME Bank, when disinvesting its funds, had at times requested VBS Mutual Bank to forward funds to accounts at other financial institutions in South Africa, and that VBS Mutual Bank deposited N$37,1 million directly into the SME Bank account in Namibia.
“The list [in the latest KPMG report] indicates all deposits and withdrawals as instructed and none of the money was lost, as claimed. Questions should be asked about another N$120 million, which is invested with other big banks,” he noted.
“The question is whether there is a vendetta we are not aware of, because no one seems to be interested in coming out to say that the money is not hidden and is there with other financial institutions and can be recovered,” Ramavhunga said.
New Era reported in March how a KPMG report detailed the flow of money from SME Bank accounts to VBS Mutual Bank, and Mamepe Capital. The funds were then disinvested from these two institutions and deposited with other financial institutions between August 12 and October 14, 2016.
“The media reports we are reading seem to suggest that the money was lost at VBS and Mamepe, which is not true,” Ramavhunga hit back, pointing out that the new KPMG report was done at the request of VBS Mutual Bank to verify the transactions involving SME Bank funds invested with VBS Mutual Bank.
“There was a subpoena in place last week here in South Africa, where all banks and other big institutions [had to] come forward to acknowledge the existence of SME bank money in their books, and we are concerned and surprised, because we were able to account for the money invested with us and how it was paid back, but nothing is said about the rest of the money that was invested with other big institutions. This information is not being disclosed,” he said.
KPMG’s June 7 report shows VBS Mutual Bank transactions dating back to August 2016 involving nearly N$70 million of SME Bank’s investments held in various accounts, including a 32-day notice account. According to the KPMG report, SME Bank had been withdrawing its money accordingly, at times incurring penalties for withdrawing the funds before the maturation date.
As of March 31 this year VBS Bank held no investment accounts of SME Bank, although VBS Mutual Bank did still pay over to SME Bank the outstanding interest as recently as April.
“The factual findings of the KPMG report confirm that all transactions between VBS Mutual Bank and SME Bank are valid, above board and were signed for by authorised signatories and that all the money invested with VBS Mutual Bank was returned to SME Bank with interest,” Ramavhunga insisted.
The report noted that at one point in December 2016 VBS Mutual Bank “flagged the transactions in and out of SME Bank accounts held with VBS Mutual Bank in a Suspicious Activity Report (SAR)”, dated 9 December 2016 and noted that “the accounts were suspended the previous day on 08 December 2016”.
It was in fact SME Bank that had requested VBS Mutual Bank to close its accounts through a letter, dated March 31, 2017, and VBS confirmed the closure of the accounts about two weeks later.
“VBS Mutual Bank did not act in any illegal way in this matter,” Ramavhunga maintained.
“Any amount invested with VBS Mutual Bank is capitalised automatically at going rates applicable to the investment term. These rates are comparable to – if not more than – the rates offered by other banks,” he said.