UPDATE: Court orders VBS Bank to be liquidated | Fin24
 
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UPDATE: Court orders VBS Bank to be liquidated

Nov 13 2018 10:31
Pelane Phakgadi and Lameez Omarjee, Fin24

The North Gauteng High Court has issued a final order to liquidate VBS Mutual Bank.

This after the South African Reserve Bank's Prudential Authority applied for the final liquidation of the mutual bank. In its affidavit, which went unopposed, the Authority submitted that the order to liquidate the bank was necessary, would be beneficial to the creditors of the bank, and that it was in the interest of the public.

It further submitted that VBS was "hopelessly insolvent", both factually and commercially.

It is now expected that a liquidator should be appointed so that necessary civil and criminal proceedings can be pursued to hold those accountable for the looting of almost R2bn rand.

The SARB's Prudent Authority argued that there was no reasonable profitability, and that the continuation of the curatorship would not enable VBS to pay its debts or meet its financial obligations, let alone become a successful concern.

The judgment states that it is "not in the interests of the depositors and the public, where much debate presently rages about the fate of VBS, for the present status quo to remain".

The judgment comes despite calls by government, and some political parties, that the bank be saved.

"I grant the final liquidation of the bank on the basis of facts brought before me", said Judge Johan Louw.


It is unclear whether the model of the bank will be kept, as was eluded to by President Cyril Ramaphosa in a recent Q & A session in the national assembly.

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