Justice Served: Former CFO of Collins Chabane Municipality Convicted Over VBS Bank Scandal

In a significant development within South African law enforcement, the Directorate for Priority Crime Investigation (DPCI), also known as the Hawks, celebrates as they make strides in the notorious VBS Mutual Bank scandal. Eadie Makamu, the former Chief Financial Officer (CFO) of Collins Chabane Municipality, was found guilty of financial misconduct and sentenced by the Pretoria High Court.

Makamu's criminal activities revolve around the illegal investment of a staggering R120 million belonging to the municipality into the now-defunct VBS Mutual Bank. This action was a clear violation of Section 173(1) of the Municipal Finance Management Act, 2003 (MFMA). His conviction not only highlights accountability but also strives to mend the financial damage caused.

The court’s decision mandated a 5-year suspended sentence for Makamu, under the stringent condition that he avoids similar convictions for the duration. Additionally, he’s obliged to reimburse R150,000 to the VBS liquidator to partly mitigate the financial devastation affecting investors and municipalities. His immediate monetary responsibility included an upfront payment of R60,000, with the remainder scheduled over the next few months.

The rippling effect of the VBS bank’s collapse was monumental, with Collins Chabane Municipality bearing substantial unrecovered losses of approximately R123,984,685. Investigations unearthed a cycle of corruption where funds were diverted to pay brokerage commissions in an elaborate grooming scheme to lure more municipal deposits.

Makamu’s arrest on May 5, 2022, was a part of a broader crackdown that has seen multiple arrests and convictions. The battle against corruption orchestrated around the VBS scandal intensifies, with Makamu’s co-accused, Charlotte Ngobeni, set to face trial early in 2025.

Lieutenant General Godfrey Lebeya, National Head of the DPCI, reflected on the progress: "The ongoing efforts of our investigative and prosecutorial teams continue to yield significant results. With 35 arrests and 6 convictions to date, we are steadfast in our commitment to restoring justice and recovering public funds."

This case forms a critical narrative in South Africa's fight against financial crime, with implications for governance and the broader integrity of the public sector. As the DPCI continues to untangle the complex web of deceit spun by the collapse of VBS Mutual Bank, there is a hopeful horizon that those affected may see some form of restitution and justice.