VBS. Dewald van Rensburg
Nzama, who is also the chairperson of the church and in control of its operations. A direct relationship with Nzama would help squeeze Firmanox out of all Shembe plans and even lead to the loss of its rights to the Shembe TV channel, Ntshayintshayi alleges.
The plan for a Shembe bank continued, but hit a seemingly insurmountable snag: the tiny mutual bank did not have the infrastructure to sign up millions of new account holders. Ntshayintshayi claims VBS went abroad for help. ‘They said they were engaging with another company,’ he told me. ‘I think they were talking to this company that was paying grants, what do you call them, Net1. Because their system could handle millions of people, so they wanted to talk to them, that is the information they gave to me. I think their offices are in London or something; they flew there to buy the system that can take the numbers. They were going to apply for the licence that was needed because they were going to work under their licence as VBS, but they said something about applying for a commercial licence and another one. I think there were two or three licences they wanted to apply for so that they can be fully fledged.’
Visa and Mastercard also had to approve the cards, Ntshayintshayi said.
These fundamental constraints would remain throughout VBS’s life. Late in 2017, VBS even found its way back to Stellenbosch to try to get a ‘white-labelled’ bank card deal with a major banking group, without success.
In the meantime, the Shembe mobile project seemed to be making more progress. Black Label secured a memorandum of understanding with MTN in February 2016 for the Shembe network to piggyback on MTN’s infrastructure. By May 2016, Tshifhiwa Matodzi and VBS were clearly involved on the mobile side. On the 31st of that month, Samuels wrote to Matodzi saying that he needed money for the telecoms business:
Hi Tshifhiwa
Iro Black Label Telecoms and its funding requirements, we also require the working capital as we have secured our Dbn offices and in the process of finalising the lease from 1 June 2016 … Per our recent request, we require same for month of May 2016 as per attached which is R4,588,500. As a minimum to meet monthly obligations, we require R745,000 and the balance of R3,843,500 by the end of this week. The funding must be paid into the following account …8
MTN CEO Mteto Nyati and chief enterprise officer Alpheus Mangale were invited to meet the church leaders at Shembe’s headquarters in Ebuhleni, KwaZulu-Natal. According to a briefing document prepared for the MTN delegates, they were to be met at the airport by Madzonga and Firmanox’s representatives and then taken to the holy mountain Nhlangakazi, where God had instructed the church founder, Isaiah Shembe, in 1910.
After meeting some of the church leaders, the MTN bosses would be off to an early supper at the Oyster Box Hotel in Umhlanga with Reverend Nzama, chairperson and administrative leader of the church. The next morning, they were due to visit the spiritual leader Shembe Unyazi himself. ‘As part of the spiritual culture, when visiting the leader of the Church, the MTN delegation will be expected to give some offerings (like Laptop and Phone handset) to the Leader for blessings,’ advised the briefing document. Ntshayintshayi said this business visit-cum-pilgrimage was repeated for VBS in relation to the bank deal.
The merchandising side also seemed to be moving. Following his 31 May email to Matodzi about money for Black Label, Samuels sent a second email to let Matodzi know that Sabicorp needed R833 500 in relation to the Shembe Unyazi Vaseline plant, to be paid into Sabicorp’s VBS account. Samuels forwarded this email to Solomon Maposa, VBS’s managing director for retail, with a spreadsheet detailing the funding requirements for the proposed plant. It looked like a profitable idea. Samuels projected that he would need R4.65 million to set up the plant and calculated a monthly profit of R1.23 million selling Shembe Unyazi Vaseline at R13 per 100-millilitre jar.
The Shembe church and its leadership seemingly did gain from its relationship with VBS and its associates. It received a R500 000 sponsorship in July 2016 from Black Label’s VBS account. More importantly, it later received significant sponsorships from Vele Investments. Vele’s bank statements record numerous ‘Shembe sponsorships’ totalling R4 million paid on 27 December 2017 and 4 January 2018. One transaction for R300 000 was marked ‘Mbongwa Friend Nzama’.
The real winner, however, seems to have been Madzonga. His work on the Shembe projects seemingly earned him consulting fees from all involved. Bank records show he got R400 000 from Sabicorp, R700 000 from Black Label and R880 000 from Firmanox, all in the first half of 2016. Investigators into VBS have called these ‘gratuitous payments’,9 but Madzonga insists they were legitimate consulting fees.
Madzonga testified that his payments from Sabicorp were because he ‘assisted the company with designs of their retail products and engaged with industry experts on their behalf in relation to negotiations relating to costs of service and incidental issues’.10
The plot thickens, however, as Firmanox, for one, insists it never paid Madzonga a cent. ‘Firmanox has never made payment to Robert nor his businesses,’ Ntshayintshayi told me. ‘As things stand, we do not know how possible it is that those payments were made.’11 This is despite the payments reflecting in both Firmanox’s VBS account statements and Madzonga’s Standard Bank account statements. To be fair, VBS bank statements were often deceptive. Many companies have told me they had no control over accounts held in their names. This has to be corroborated on a case-by-case basis, but it almost certainly happened to some people.
Firmanox, Sabicorp and Black Label ended up having a far bigger problem on their hands. They were all later found to have irregularly received millions from VBS for no reason whatsoever. Firmanox apparently got R19.5 million, Sabicorp R6.5 million and Black Label R5.5 million. ‘Firmanox do not owe anyone such amount,’ Ntshayintshayi insists. According to him, this money, which led to his company being identified as an illegal beneficiary of VBS money, was paid to settle Firmanox’s debts.
Needless to say, the plan for a grand Shembe Unyazi Bank of South Africa never worked out. Ntshayintshayi told me he should have known better from the start, at least when it came to Madzonga: ‘After I met him I googled … I found that this guy was said to have done so many wrong things with MTN, then I called a meeting and I spoke about him and they said, no, no, it won’t affect it, but it does not look good at all.’
Madzonga’s history would soon become a problem at VBS as well. A month after bringing Firmanox and the rest to VBS in February 2016, Madzonga claims he became a consultant for the other side – working for VBS to secure new business. In May 2016, VBS sent an application to the SARB to approve his appointment as COO of the bank. He started work immediately in a provisional capacity. According to him, he began raising corporate governance concerns straightaway and these ‘did not prove popular with the executives of VBS’.12
Many people have unkind things to say about him. One source described him as incredibly narcissistic. Another called him an incorrigible ‘arse-creeper’ when it came to ingratiating himself with Matodzi.
In his sworn affidavit, Madzonga said that it was really all down to Ramavhunga: ‘I wish to point out to the court that Ramavhunga is the only person who was uncomfortable with the implementations and as a result, we had constant fights which led to the acrimonious relationship between us.’13
But that’s not why Madzonga left VBS. The SARB wouldn’t let him stay. ‘I was informed by the then executives of VBS, including Matodzi and Ramavhunga, that my services were not needed as chief operations officer,’ Madzonga testified. ‘I was told that the Registrar had raised concerns about my appointment as chief operating officer.’14
They weren’t kidding. In a letter to VBS, the registrar of banks, Kuben Naidoo, was unequivocal about Madzonga’s unsuitability for the job. Apart from his lack of banking experience, there were concerns about allegations of misconduct and irregularities when he was the chief corporate services officer at MTN. The Directorate for Priority Crime Investigation (the Hawks) had investigated his role in supposed corruption around MTN’s sponsorship of an ICT indaba in 2013. A report by PwC had also found ‘alarming evidence of corruption’ at MTN relating to Madzonga signing off on fake invoices worth over R12 million.15
After the letter from the SARB, Madzonga was removed from his acting position at the