Former CFO Sentenced To Five Years And R150k Fine In VBS Scandal

The Pretoria High Court has sentenced former Collins Chabane Municipality Chief Financial Officer (CFO), Eadie Makamu, to five years in prison and imposed a R150,000 fine for his role in the collapse of VBS Mutual Bank.

The sentence stems from Makamu’s violation of the Municipal Finance Management Act (MFMA) related to the illegal investment of R120 million of municipal funds into VBS Mutual Bank, which later collapsed.

Sentencing Of Makamu

Makamu received a suspended five-year prison term, conditional upon not committing a similar offence during the suspension period.

Additionally, he was ordered to pay R150,000 to the VBS Liquidator, who will distribute the funds to victims of the bank’s collapse. The payment plan includes an upfront R60,000 payment and five monthly installments of R18,000 each.

Hawks spokesperson Colonel Katlego Mogale revealed that the municipality suffered a staggering loss of nearly R124 million due to the failed investment. Investigations uncovered that part of the funds was siphoned off as brokerage commissions to individuals and entities in a fraudulent scheme to attract more deposits from municipalities.

Arrests and Convictions in VBS Scandal

Makamu was arrested in May 2022 alongside his co-accused, Charlotte Ngobeni, who will face trial in January 2025. According to Lieutenant General Dr. Godfrey Lebeya, head of the Hawks, this conviction is part of ongoing efforts to hold accountable those implicated in the VBS scandal. To date:

• 35 arrests have been made in connection with the investigation.
• Six convictions have been secured.

The funds lost by the Collins Chabane Municipality highlight the broader financial fallout from the VBS collapse, which left municipalities and individual investors with significant losses. While the recovery of R150,000 is a small fraction of the total, it marks a step toward restitution.

Lieutenant General Lebeya commended the investigative and prosecutorial teams, emphasising that such efforts continue to yield results in uncovering corruption and ensuring justice.

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