Mogajane’s resignation has sent shockwaves through the financial sector in South Africa. The former Treasury Director-General stepped down amidst allegations made by Tshifhiwa Matodzi, the ex-chairman of VBS Mutual Bank. Matodzi is currently serving a 15-year jail term for his involvement in the collapse of the bank in 2018.
The collapse of VBS Mutual Bank was a massive scandal that rocked post-apartheid South Africa. The bank’s collapse was particularly devastating as many of the victims were poor, black, and female. The scandal involved a pyramid scheme that defrauded pensioners and financially struggling municipalities of their deposits, resulting in a staggering loss of around R2 billion.
According to a report by Bloomberg, Mogajane has vehemently denied the allegations related to the VBS bank collapse. In a statement, he said, “Some false allegations have been made by a convicted felon and I categorically deny any wrongdoing. Proper processes must be followed. I fully understand the consequences of these allegations. I’m humbly going to step down from all boards that I currently sit on.”
The VBS scandal exposed a web of corruption where the bank’s owners bribed officials in poor and dysfunctional municipalities to divert their budgets into VBS in exchange for cash and gifts. The bank essentially became a corrupt fund for politicians and their associates. Despite the allegations, Simelane has denied any involvement in the corruption scandal.
The resignation of Mogajane highlights the deep-rooted corruption that plagues South Africa’s financial institutions. It serves as a reminder of the importance of transparency and accountability in the management of public funds. As the country grapples with the aftermath of the VBS scandal, there is a pressing need for stricter regulations and oversight to prevent similar incidents in the future.
