VBS Paid Officials for Quick Funding, Times Says

(Bloomberg) -- South African lender VBS Mutual Bank, which collapsed in March, paid senior officials at the Public Investment Corp. to fast-track funding for the lender, the Johannesburg-based Sunday Times said, citing an affidavit by the bank’s former head of treasury Phophi Mukhodobwane.

The bank’s former treasurer was instructed to deliver a suitcase filled with 5 million rand to a senior executive at PIC, which manages state-worker pension funds, to ensure receiving about 2 billion rand ($150 million) just before the bank was placed under curatorship, according to the newspaper.

While the PIC isn’t aware of any wrongdoing, it would rely on its disciplinary codes should any information emerge that implicates a PIC employee, said head of corporate affairs Deon Botha said in response to emailed questions.

“The PIC will also request law enforcement agencies to investigate such matters if there is any suspicion of criminal activity,” Botha said.

VBS Bank didn’t immediately respond to requests for comment on the newspaper report.

The South African Reserve Bank sought to rescue VBS, one of the country’s smallest lenders, in March. It said in May it would start a forensic investigation after some VBS depositors’ funds couldn’t be traced. An update on the investigation will be offered on Monday.

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