Johannes Mohlala, the former municipal manager of the Fetakgomo-Tubatse Local Municipality, has been handed a five-year suspended sentence in the Pretoria High Court for his role in the R230 million VBS Mutual Bank scandal.
The sentence, delivered on Thursday, follows Mohlala’s guilty plea to contravening the Municipal Finance Management Act (MFMA). The 60-year-old was also ordered to pay a R100,000 fine to the VBS curator.
The Hawks, who led the investigation, detailed Mohlala’s actions. Hawks spokesperson Col Katlego Mogale stated: “The investigation revealed that Fetakgomo-Tubatse Local Municipality invested an amount of R230 million which was paid in five trenches from 15 November 2016 to 19 February 2018.”
This significant investment, made in contravention of the MFMA, represents a substantial portion of the funds misappropriated during the VBS scandal.
Mohlala’s conviction and sentencing occurred on the same day he entered his guilty plea, highlighting the strength of the case against him. His co-accused, however, faced differing fates. Tumelo Ratau, the municipality’s former CFO, failed to appear in court, resulting in a warrant being issued for his arrest. The case against Ratau was postponed to 18 November 2024 for the forfeiture of his bail.
A third accused, businessman Keaobaka Remigious Kgatitsoe, received a separate sentence earlier. Mogale explained that Kgatitsoe “was sentenced to five years imprisonment which was wholly suspended for five years when he appeared in the Pretoria Specialised Commercial Crime Court on 12 July 2022, on the Fetakgomo Tubatse Local Municipality case relating to VBS investments.” The differing outcomes underscore the individual circumstances and levels of culpability within the broader VBS scandal.
The initial arrests of Mohlala, Ratau, and Kgatitsoe took place in November 2021 at their Pretoria homes. The charges against them included contravention of section 173 of the MFMA, corruption, and money laundering. These charges reflect the multifaceted nature of the alleged crimes, encompassing financial mismanagement, potential bribery, and the illegal movement of funds.
The VBS Mutual Bank scandal has been a significant focus of law enforcement and public scrutiny for several years. The collapse of the bank resulted in substantial financial losses for numerous municipalities and investors. The case against Mohlala is one of several prosecutions stemming from the wider investigation into the bank's fraudulent activities.
The timing of Mohlala’s sentencing coincides with another high-profile development within the context of the VBS scandal. Dondo Mogajane, the former director general of the National Treasury and current chair of the Government Employees Pension Fund, recently announced his resignation from all professional roles and boards. This decision follows allegations of bribery related to the VBS affair.
Finance Minister Enoch Godongwana acknowledged the reputational risk posed by Mogajane’s alleged involvement, stating last week that he would “deal with” the matter. These statements highlight the ongoing ramifications of the VBS scandal, extending beyond the immediate perpetrators to individuals holding positions of significant influence and responsibility within the South African government.
The allegations against Mogajane include receiving a R1 million bribe. This claim, made by former VBS chairperson Tshifhiwa Matodzi in an affidavit as part of a plea deal, alleges that Mogajane accepted the bribe in exchange for withdrawing a Treasury letter instructing municipalities to cease depositing funds with VBS. This alleged action would have allowed VBS to continue its fraudulent activities, potentially exacerbating the financial damage caused by the scandal.
