VBS. Dewald van Rensburg
started in December 2015 when Madzonga claims to have struck a ‘verbal agreement’ to be a consultant to three different companies: Firmanox, Black Label Telecoms and Sabicorp.
Firmanox was a small media company that clinched the exclusive rights to produce and broadcast a dedicated Shembe Unyazi television channel for a period of fifteen years. It struck the deal in March 2015, and in July the modest new station was launched to broadcast church services.
Far more important to Firmanox than the television rights, however, were ancillary rights it had got from the church. It claimed to have ‘exclusive financial rights’ to develop products for Shembe Unyazi, including a church mobile service, merchandise and, most importantly, financial services. It just needed partners that were actually able to deliver mobile, manufacturing and financial services. Firmanox also needed someone to help pay the debts it had incurred with the creation of the television channel. Enter VBS.
‘They came into my life and everything was taken from me,’ Firmanox’s co-owner Simon Ntshayintshayi told me. ‘You know, I am not educated … I built my business from scratch on my own with my partner. From these guys who have master’s degrees and what what, we thought no man, how can they double-cross [us]?’2
The company now faces possible liquidation at the hands of VBS’s liquidator because, on paper at least, it received free VBS money. Ntshayintshayi claims that VBS and its cohorts hijacked all his plans.
The first plan to start gaining traction was the Shembe Unyazi mobile network. Black Label Telecoms (trading as Shembe Unyazi Mobile) was set up with Madzonga’s help. Its owner was Adrian Samuels, a Durban businessman best known for being duped into buying several kilometres of Transnet rail sold to him and his cousin by corrupt officials (no one accused Samuels of wrongdoing). Firmanox sold Black Label the rights to the mobile network.
Ntshayintshayi told me that he first met Madzonga through Black Label: ‘The first time I met him, it was as someone they brought from telecoms … they said he was working for MTN and he would assist with running the Black Label Telecom, that is exactly how he was introduced.’
The merchandising part of the plan involved a company called Sabicorp, also headed by Adrian Samuels. The manufactured products were to include uniforms, branded water bottles, energy drinks, umbrellas, key chains and even Vaseline – basic pilgrimage gear.
It is a little uncertain exactly how VBS became involved. Ntshayintshayi’s version differs from Madzonga’s. According to Madzonga, it was Firmanox who directed him to VBS.
Shortly after becoming a consultant to the three companies, Madzonga alleges he headed to Stellenbosch accompanied by representatives of Black Label and Sabicorp to meet with Capitec Bank. He wanted to pitch a financial services project in partnership with Firmanox. Judging by emails between the delegates afterwards, the meeting went well. On his return from Stellenbosch, Madzonga met with Firmanox CEO and Ntshayintshayi’s partner, Konanani Muleba, to give him feedback. Muleba suggested that they also approach VBS. His hope was that giving their business to VBS instead of a major bank would ‘promote empowerment policies’, Madzonga wrote in a sworn affidavit against his final sequestration in 2018.3
The Venda network was put to work again. To get to VBS, Madzonga resolved to go through the king. ‘I approached one Mr Paul Makhavhu, the advisor to the VhaVenda King, his Majesty Toni Mphephu Ramabulana,’ said Madzonga. ‘Makhavhu was to me the suitable person to assist me because the royal family is the founder of VBS. Makhavhu was happy with the idea and he made arrangements for [Muleba] and I to meet with him and the King in order to present our business concept to the King. Pursuant thereto, the King gave Makhavhu the blessing to introduce me to the stakeholders at VBS.’4
Ntshayintshayi has a different story. He alleges VBS came to them, presumably due to Madzonga’s intervention, and that he was sceptical at first: ‘I didn’t know the bank. I didn’t know there was a bank like that existing … Actually, they called me and I could not give them an audience, then they called my partner [Muleba], my partner was Venda … And then we had a meeting in their offices in Rivonia. Then we went there and we were introduced to the CEO and another white guy. I think he was in the bank or something.’5
The ‘white guy’ was undoubtedly Philip Truter, VBS’s CFO.
It was only after this, said Ntshayintshayi, that Madzonga began to show up for all the VBS-related Shembe bank meetings and he figured out it was all connected. Either way, by early 2016 Firmanox was pitching ideas to VBS.
A presentation prepared for VBS by Muleba proposed that the bank fund Shembe Unyazi TV and from there they could go on to create the new Shembe bank, selling financial products to church members with the invaluable endorsement of the church and its leader.
A memorandum of understanding (MoU) was signed that would see VBS own 60 per cent of the new bank, Firmanox and Black Label 10 per cent each, and a yet-to-be-established ‘Newco’ 20 per cent. It is not clear who this 20 per cent shareholder was meant to be, but Madzonga signed on its behalf while its contact person was given as VBS’s Ramavhunga. It seems unlikely that the church or its leadership would not be cut in somehow. Madzonga also signed on behalf of Black Label, while the company’s owner, Adrian Samuels, signed as a witness.
Madzonga hardly looks like the mere consultant he claims to have been. In the MoU, it is recorded that Firmanox would get a monthly ‘sponsorship’ of R666 000 for the television channel as consideration for diluting its share in the rights to provide Shembe financial services.
The most astonishing aspect of the document was that it envisaged all church members being issued membership cards that were also Shembe-VBS bank cards. Shembe churchgoers would have no choice but to bank with the new bank. Also strange was that the agreement indicated that enrolling all these new members/clients would cost only R5 million. There is no way that is even close to being right. That’s at most R2.66 per applicant; the paper for the forms alone would cost more than that.
Just as it signed much of the banking rights over to VBS, Firmanox signed the mobile rights over to Black Label. In an email to Madzonga, Samuels wrote that Black Label ‘does not need Firmanox or the Church to co-sign the MoU or any commercial agreements’.6 Firmanox’s role was steadily shrinking. According to Ntshayintshayi, VBS and co. effectively wanted to pay him off by settling all the debts Firmanox had incurred in its media business. At one point, Sabicorp apparently made a bid to simply buy the company and its rights.
‘I refused,’ said Ntshayintshayi. ‘For me it is about making black people realise that they will always cry about government, but there is a potential within themselves. The church would be valuable, the church can have an agreement to say whoever has an account at this bank, the church can get a rand or whatever … The church already had the plans there to build their own schools up to college. They are pushing their own religion. The plans were there and I came and said I can help you raise money for those projects. I bring in a financial services provider and then from each and every transaction the church gets something. Me, as a company, I will get something as well. And then when you have this telecom company, then you can have free minutes … say everyone must spend R50 a month and then they will qualify for an hour for free every day between themselves as church members. So there were a lot of things that I sold to the bank.’7
Ntshayintshayi’s own contributions to the Shembe church plan were forgotten, he said. Among them was the design of the prospective Shembe-VBS bank cards. ‘There were three types,’ he told me. ‘The leader was going to have his own card and then those who are higher were going to have their own and then there was going to be an entry level. I designed that myself … they printed the card and then they brought it and I took them to the church and the church approved.’
Firmanox’s business partners seemed to view them as more of a hindrance than an ally. They were not happy to have to go via Ntshayintshayi and Muleba. ‘They started to complain that they were looking for people in the church they can run the project with,’ Ntshayintshayi said. ‘Then they left me behind … I’ll tell you what they were trying to do. I introduced them to the one that was running the affairs, the business of the church. They captured him. The reverend in the church. They agreed that they can