30 October 2018

South Africa: Banking Authority Files for Liquidation of VBS

The Prudential Authority, formerly known as the Registrar of Banks, has filed court papers seeking the liquidation of VBS Mutual Bank.

In a press statement issued on Tuesday morning, the Prudential Authority (PA) confirmed that it had filed the application with the North Gauteng High Court in Pretoria.

"Whilst VBS is currently under curatorship pursuant to a decision taken by the Minister of Finance on 10 March 2018, the PA is of the view that curatorship must now be terminated and VBS must be placed in final winding-up," the statement reads.

"This is as a result of the fact that VBS is hopelessly insolvent and massive frauds have been perpetrated against it. As a result, there is no prospect of entering into any resolution plan in respect of VBS."

The liquidation was in the best interests of all parties, it added.

The final winding-up was also recommended in the bombshell investigation report by advocate Terry Motau that was made public earlier this month.

The PA expects the application to be set down for November 13.

News24 reported last week that Mahikeng Local Municipality had also filed a liquidation application with the Limpopo High Court.

In the statement, the PA said that Mahikeng's application was flawed.

"The PA is of the view that the Mahikeng Local Municipality's application is defective for a number of reasons, including that it is the PA who should terminate curatorship by liquidation. The PA has not been joined in the Polokwane High Court application and it is the Pretoria High Court which exercises jurisdiction in this matter," the statement concluded.

More to follow.

Source: News24

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