VBS. Dewald van Rensburg
for Advocate Terry Motau that she personally faked agreements and even copied and pasted client signatures. She said that basically all the contracts were faked, sometimes long after the fact. Some deals from 2015 were amended in late 2017 as one of several means of drawing money into VBS that had developed by that time.2 The result was a mix of fake and real fuel finance and a generally impossible-to-follow paper trail.
‘I don’t [know] if those companies were real companies. But, you know, we … relied mainly on management,’ the PIC’s Khaya Zonke told the Mpati Commission of Inquiry. ‘We did not have a reason to second guess what they were telling us because we did not have any experience of, you know, wrongdoing and so forth. Our relationship with the company was okay, so when they provided us with the list we believed those companies were in existence and the amounts that were reflected in the report were actually the amounts that were advanced to these companies. That was our belief.’3
VBS treasurer Phophi Mukhodobwane would later testify that he really didn’t know how much of the fuel contract business was real.4 He joined VBS late in 2016 after much of the fuel contract finance had already been done. He knew at least some of the beneficiaries were suspicious.
The PIC’s forensic report found that many of the companies that allegedly did fuel deals with VBS shared the same address. ‘The possibility that these companies were part of a syndicate or fronts for siphoning of funds can therefore not be excluded,’ stated forensic contractor Nexus. ‘Due to the limited information, it is impossible to determine how many fuel contracts were in fact entered into between VBS and SMMEs [small, medium and micro-enterprises].’5
On top of the apparent outright fraud around the PIC fuel facility within VBS, Matodzi had big plans for Vele Investments. Vele Petroport, which had been sitting idle since the PIC facility was approved, set its sights on the bigger, legitimate users of this resource.
Belton Park Trading 134 was an established fuel trader serving a variety of clients not limited to the public sector. It had got significant vehicle finance from VBS in late 2015 and early 2016 to buy fuel tankers and became a frequent user of the fuel facility.
Mmampilo Petroleum was a fuel business with ties to VBS and a valuable deal with Sasol for low-cost diesel. A long-established business, it is unclear how it got so entangled with VBS that it seemingly shared an address with the bank in the Metropolitan Office Park in Rivonia.6 More suspiciously, Mmampilo’s two owners, Vukani Nxumalo and Sibusiso Mavuso, were both granted bonds worth over R2 million by VBS on the same day in the early days of the PIC facility: 16 September 2015.
Afric Oil was a well-known fuel trader with an invaluable contract to supply Eskom’s emergency turbines with diesel – easily the biggest diesel contract in the country. Its link to VBS was an arrangement with Belton Park, one of its suppliers, whereby Afric Oil would directly repay the debt to VBS that Belton incurred under the fuel facility. It just made things easier than paying Belton and then having Belton pay VBS.
Robert Madzonga was on a mission to turn Vele Petroport into a major player in the fuel space and a worthy recipient of PIC cash via VBS. His job was to oversee the merger of Mmampilo, Belton Park and ultimately Afric Oil.
Belton, Mmampilo and Petroport started provisionally cooperating as a single entity through June to December 2016. Belton paid Petroport management fees and Petroport paid a salary to Madzonga, among others. The process of acquiring Afric Oil was on track, with the deal going all the way to the Competition Commission for approval.
Once Petroport was up and running, Vele Investments had its vehicle for tapping the PIC-funded VBS fuel facility. Even in this evidently legitimate form, the VBS fuel business was being used to Vele’s and Matodzi’s benefit. Bank records show that VBS was already accommodating Petroport with a massive overdraft to cover most of its expenses.
Another Vele finger in the pie was Hlomphanang Logistics, a trucking company co-owned by Vele and which apparently served as a subcontractor to Mmampilo. VBS extended millions in credit to Hlomphanang, which the company spent on real operational expenses.
Hlomphanang originally belonged to Mcmillan Matome Letsoalo, a member of a well-known and allegedly politically well-connected Limpopo business family. Vele acquired 75 per cent of the company somewhere along the line, and shared other business interests with Letsoalo. Not least was MML Food Services, a food distribution company that later quietly became a major conduit through which money left VBS for Matodzi’s benefit.
There were massive conflicts of interest in Matodzi being a shareholder of both VBS and Vele. At the very least it was extremely bad corporate governance. If the merger had gone ahead, Vele Petroport would have shouldered out the intended beneficiaries of the programme: a broad base of SMMEs.
It didn’t go ahead. The plans to merge were abandoned after six months. Despite receiving clearance from the Competition Commission, Afric Oil claims the deal failed because Vele never came up with the money. ‘We signed contracts, we did everything, they were going to pay the money and we just kept waiting and asking, where is the money, where is the money, and the money never came and the contract expired,’ Afric Oil’s then CEO, Tseke Nkadimeng, told me.7
According to Belton Park’s CEO, Julius Jooste, there were protracted negotiations with Vele as well as with Mmampilo. They fell apart due to what Jooste called irreconcilable differences with Mmampilo and lack of funding from Vele for the Afric Oil part of the plan.8
The conflicts of interest and alleged dodgy dealings between Matodzi’s Vele and VBS only got worse.
As mentioned previously, VBS CEO Andile Ramavhunga was already earning a modest sweetener of R50 000 a month from Matodzi’s Venmont Holdings. During the Petroport negotiations, Ramavhunga suddenly started getting another additional monthly payment, this time from Petroport. In July 2016, he received R95 000, but this quickly escalated to R300 000 per month. Overall, he got R1.6 million during the negotiation period, but admitted to SARB investigators that it was actually more, because he received earlier payments from accounts at other banks that weren’t reflected in the VBS statements on which the investigation was based.
Ramavhunga claimed he had a ‘verbal’ agreement with Petroport and that the payments were his ‘management fees’ for helping set up the new venture.9 Even if true, he was the boss of the bank that was funding the group he was ostensibly advising. His employment contract forbade him from doing this kind of side work. It was a rule he would break many more times.
According to the VBS CEO, he earned his fee because he had ‘brought the parties together’ in 2015. The parties in question were Vele, Mmampilo and Belton Park, he said. But then he backtracked, saying, ‘I never brought Vele into the transaction … I never spoke to Tshifhiwa about this transaction. It was only at a later stage that he came. What I did was to see an arbitrage opportunity between Belton and Mmampilo, where Belton were buying at a significantly lesser discount and Mmampilo were getting a higher discount. I just put the two together in terms of what they needed to do … I did not see anything wrong at the time because I thought I was creating value for the clients, which was outside of my responsibilities as the CEO of the bank.’10
More distressing is who else got money out of Petroport. They were often people with no discernible role in the fuel business, and no business being anywhere near it. Ramavhunga told investigators that his old friend from university (and later VBS manager), Tsumbo Matambela, also got on board and received Petroport payments. These are visible in bank statements. Another recipient was Paul Makhavhu, the ubiquitous representative and proxy for the Venda king, Toni Mphephu Ramabulana. Matodzi got paid too, as did Madzonga.
They all received similar amounts on the same day every month.11 It seems everyone was working on Petroport. Madzonga, the man actually appointed to run the show, made about R2 million from Petroport in the six months of the negotiations – but so did everyone else. When VBS crashed and investigators circled, Ramavhunga called up Belton Park’s Jooste to try to get him to confirm that he did in fact work on the deal and had earned his fees. Jooste was not cooperative. He wrote an email to Ramavhunga:
Hi Andile,
We worked closely with Robert Madzonga and Tshifhiwa Matodzi, we did meet with