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Tshifhiwa Matodzi, the man behind a $130 million (£100 million) banking scandal that sparked national outrage in South Africa, has been sentenced to 15 years in prison. Matodzi, the former chairperson of VBS Mutual Bank, admitted his role in the collapse of the bank in 2018 after years of looting.
The scandal, which defrauded ordinary South Africans, reached from impoverished rural villages to government circles. On Wednesday, Matodzi pleaded guilty to 33 charges, including corruption, theft, fraud, money laundering, and racketeering. Although his combined sentences amounted to 495 years, the court ordered them to run concurrently, resulting in a 15-year prison term.
Dubbed “the great bank heist” by a 2018 report following a central bank investigation, VBS Mutual Bank was initially a modest institution. It served rural communities on land controlled by traditional rulers, offering mortgages and savings options for family funerals. However, it was transformed into a slush fund for corrupt politicians, local government leaders, and their business associates through an elaborate pyramid scheme.
The bank’s owners bribed local officials in some of South Africa’s poorest municipalities, persuading them to divert or pretend to divert their budgets into VBS’s coffers in exchange for cash and gifts. The full extent of the looting and political intrigue was uncovered only after the central bank took control of VBS, which was placed into liquidation in November 2018.
Matodzi masterminded the looting with the help of a team of skilled accountants, lawyers, and a network of fraudulent shell companies and subcontractors. Despite numerous arrests in the VBS case over the years, only Matodzi and former VBS chief financial officer Phillip Truter have been found guilty and sentenced.
South Africa’s elite Hawks police unit, the Directorate for Priority Crime Investigation (DPCI), which handles corruption investigations, stated that it is “pursuing other suspects” in the VBS case.
