The SA Reserve Bank appears to be in Public Protector Busiswe Mkhwebane’s cross hairs once again, over an investigation into the Bank’s role in the VBS saga.

In a press briefing on Thursday, Mkhwebane reportedly said she is “experiencing challenges” with the investigation because the Bank “seems to believe that we do not have jurisdiction over it”.

The courts ordered that VBS — a mutual bank that mainly operated in Limpopo — be liquidated in November 2018, after an investigation ordered by the Bank revealed huge fraud. The Bank, however, hit back on Friday saying that it “finds it surprising that the public protector finds it necessary to address these matters publicly while an investigation is ongoing”.

“The Bank finds it necessary to place on record that it has always fully co-operated with and assisted the public protector’s office,” the Bank said in a statement. The Bank has been waiting for the public protector to respond to issues the Bank has raised and “any assertions by the public protector to the contrary are simply not correct”, it said.

According to the Bank, it addressed the public protector, in writing, during September, regarding her investigations. It is not yet clear exactly what the nature of the complaint against the Bank is.

The public protector’s office said Mkhwebane has a two-pronged investigation into the VBS matter. The first part focuses on the suspected maladministration by various municipalities that invested in the mutual bank, public protector spokesperson Oupa Segalwe said, and was the initiative of the public protector.

For the second part, the public protector was approached by a member of the public, Selby Mokgotho, in the second half of 2018. “In a nutshell, [Mokgotho] wants the public protector to look into the role of the Bank in the liquidation of VBS,” Segalwe said.

The Bank placed VBS under curatorship in March 2018 after it experienced what was first thought to be a liquidity crisis. A subsequent investigation into the mutual bank — which held money for stokvels and burial societies — implicated numerous VBS officials and executives in the theft of almost R2bn.

The investigation, led by advocate Terry Motau, also implicated politicians, including several provincial and municipal officials within the ANC. Additional reporting by the Daily Maverick’s investigative unit, Scorpio, revealed alleged links to the EFF’s second in command, Floyd Shivambu.

This is not the first time the public protector has gone head-to-head with the Bank. She previously suffered a bruising legal defeat over her 2017 report into the Bank’s role in the apartheid-era Absa-Bankorp bailout. Her report — which recommended, among other things, that the Bank’s mandate be changed — was roundly condemned by the courts.

The legal battle ended up in the Constitutional Court, which upheld the findings of the high court and ruled that Mkhwebane acted in bad faith and was not honest in her investigations into the matter. It also upheld a punitive costs order against Mkhwebane, requiring her to pay 15% of the Bank’s legal costs in her personal capacity.

Segalwe said claims that Mkhwebane is “going after” the Bank are “absolute nonsense”. He said the public protector could not turn a blind eye when complaints are lodged with her office. “The Bank falls within the public protector’s jurisdiction and when allegations against the Bank are brought before [her], the Bank must answer when questions are asked.” (BusinessDay)

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