Former director-general of National Treasury, Dondo Mogajane, has vehemently denied allegations that he accepted a R1 million “gratification” from convicted former chairman of VBS Mutual Bank, Tshifhiwa Matodzi, in order to allow the defunct bank to continue taking municipalities deposits in contravention with the law.
According to the leaked affidavit made in his plea bargain, Matodzi implicated Mogajane in playing a role in the cover up of “The Great Bank Heist” which looted R2.3 billion from VBS, and allegedly accepted a R1m bribe for his role.
Matodzi said that he had met Mogajane five times through Raliom Razwinane, who served as an agent for VBS to find investment deposits, and in one of these meetings a R1m bribe to Mogajane was discussed.
He said the bribe was to facilitate the withdrawal of the circular issued by National Treasury in August 2017, warning municipalities that deposits made at a mutual bank contravened municipal finance regulations, and were not allowed.
In his response to the allegations today, Mogajane “set the record straight” and said he was one of the people who stopped Matodzi in his tracks, and prevented VBS from pilfering South Africa any further.
“I categorically deny that I have ever received corrupt monies or bribes. I proudly served with distinction, honesty, loyalty, and humility as a dedicated public servant for 23 years, the last five of which were as Director-General of National Treasury,” he said.
“As evidence of the stance that both myself and National Treasury took against Matodzi and VBS, all filed affidavits, statements, minutes of meetings, circulars, and general records dating as far back as 2017, are with the relevant authorities.
“I will not be trialled by corrupt individuals or those driving their own agendas, and I will not allow anyone to tarnish my name. Ultimately, I am proud to have been part of the team that stopped Matodzi and VBS’ corrupt and pilfering activities.”
According to Matodzi, Mogajane had promised to grant VBS a special 18-month dispensation to continue accepting municipal investments, during which it was in a process of getting a commercial banking licence.
It was hoped that the process would be concluded within 18 months.
“While the discussion was still on this National Treasury letter to the municipalities, Raliom then softly whispered to me regarding our earlier agreement that I should pay an amount of R1-million to Dondo,” Matodzi writes in his affidavit.
“That is when Raliom shared a whisper with Dondo, and then Dondo said a million rand is fine, nodding his head. In short, the purpose of this meeting was none other than to confirm the payment of R1m and the bank account where it was to be made.
“The payment was intended for Dondo to intervene and facilitate the withdrawal of the National Treasury letter and to grant VBS the special dispensation of 18 months for it to continue to accept the municipal investments.
“At the time, VBS had already started the process to convert into a commercial bank, and in VBS’s view, 18 months would have been sufficient for the process to be expedited.”
According to Matodzi, the money was paid into a Standard Bank account belonging to Baphile Foundation NPC, which belonged to a woman he identified as Dr Mkhize and who was also part of the meeting with Mogajane.
Matodzi was this week handed a combined sentence of 495 years as he was handed 15 years for each count. However, the court ordered that the sentences run concurrently, meaning he will serve 15 years in jail.
Mogajane’s contract as director-general at the Treasury ended on 7 June 2022 after he elected not to extend it. He had worked at the Treasury for 23 years, five of which had been as the director-general.
He is now the CEO of the Moti Group, and the chairperson of the Government Employees Pension Fund (GEPF), the largest pension fund in Africa, with assets in excess of R2.3 trillion, which are managed by the PIC.
Mogajane said Matodzi’s affidavit conveniently excluded the many meetings held in the presence of other people, including with VBS management, the Public Investment Corporation (PIC) as a VBS shareholder, the SA Reserve Bank (SARB), and other National Treasury representatives.
He said that Treasury had made it very clear that legally, VBS Mutual Bank was not allowed to continue conducting investment deals or receiving deposits from municipalities, as can be evidenced by minutes of these meetings.
“In fact, my colleagues and I became so alarmed by the actions of VBS Bank that I filed an answering affidavit against it in November 2017, wherein I confirmed National Treasury’s stance against the intentions of VBS in continuing to take municipal deposits. Later, I made another statement with the Hawks in support of their investigation into the bank,” he said.
In terms of the Municipal Finance Management Act, municipalities cannot make deposits with institutions that are not regulated as per the Banks Act.
Mogajane said he reiterated to Matodzi at every meeting that as a mutual bank, VBS was established under the Mutual Banks Act. As such, any municipal deposits with the bank were illegal.
“It was on this basis that we met with Matodzi to discuss regularising VBS as a bank. During these engagements, we warned Matodzi and VBS to stop taking deposits until such time as it had been established and regularised as per the Banks Act in accordance with the South African law,” he said.
“During these discussions in 2017 and early 2018, we were not aware that VBS was essentially a scam, and simply viewed these as engagements with a black-owned bank.”
The National Treasury is yet to make a comment on this ongoing saga and allegations implicating one of its former top officials.
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