The Directorate for Priority Crime Investigation has welcomed the conviction of Eadie Makamu, the former Chief Financial Officer (CFO) of Collins Chabane Municipality, in connection with the ongoing investigation into the collapse of VBS Mutual Bank.
On Wednesday, the Pretoria High Court found Makamu guilty of contravening Section 173(1) of the Municipal Finance Management Act, 2003 (MFMA). He was sentenced to five years' imprisonment, wholly suspended for five years on condition that he is not convicted of a similar offence during the suspension period.
As part of the sentence, Makamu has been ordered to pay R150 000 to the VBS liquidator, a measure intended to benefit those who lost their investments due to the bank's collapse.
Of this amount, R60 000 was meant to be paid on Wednesday and the balance will be settled in five monthly instalments of R18 000 each.
The conviction stems from Collins Chabane Municipality’s illegal investment of R120 million with VBS Mutual Bank.
These funds were never fully recovered, with R123 984 685 outstanding to the municipality.
Investigations revealed that some of the funds were used to pay brokerage commissions to individuals and entities in a scheme designed to attract more deposits from municipalities.
Makamu was arrested on 5 May 2022 and has been attending court alongside his co-accused, Charlotte Ngobeni, who will now face trial alone from 20 - 22 January 2025.
This conviction marks another step in holding those responsible for the VBS Mutual Bank collapse accountable.
The recovery of funds through payments to the VBS Liquidator provides a measure of relief to victims, including municipalities and individual investors who suffered significant losses.
The Hawks said it remains committed to investigating and prosecuting those implicated in corruption and fraud to ensure justice and the recovery of public funds.
“The efforts by the investigation team and prosecution team continue to bear fruits. We are able to show that 35 arrests were effected since the start of the investigation and 6 convictions secured,” said the National Head of the DPCI, Lieutenant General Godfrey Lebeya. – SAnews.gov.za
