Ex-VBS chair lifts the lid on how Julius Malema and Floyd Shivambu ...

Former chairman of VBS Mutual Bank Tshifhiwa Matodzi, who this week was sentenced to an effective 15 years in jail for his coordinated looting of the bank, has lifted the veil from a seven-year-old secret: Julius Malema and Floyd Shivambu were “promised” payments from VBS in favour of the EFF.

Malema and Shivambu were allegedly paid off not to use the EFF’s political muscle against VBS Mutual Bank.

Matodzi pleaded guilty this week to 33 counts of corruption, theft, fraud, money laundering and a pattern of racketeering activities for which he was sentenced to an effective 15 years in jail. He entered a plea deal and signed a 70-page witness statement on 10 July 2024. 

The statement with annexures totals 263 pages and took around three weeks to draft, sources say.

It is notable from Matodzi’s account that Malema and Shivambu seemingly consistently used the EFF party as bargaining power, even going so far as to allegedly say that the restaurant in Soweto is “an EFF restaurant” where the facts show that Malema and Shivambu used almost all of the loot for their personal wealth and that the EFF gained very little from the unlawful arrangement and VBS-loot.

(Daily Maverick contacted Malema and Shivambu as well as EFF spokesperson Sinawo Tambo on their phones — without success. As this is a breaking news report, their comment will be added in due course.) 

Malema and Shivambu knew the funds they received from VBS were unlawful, Matodzi claims, because Malema and Shivambu created a front company called Sgameka Projects. There was no legitimate business reason for these payments — they told him they needed money for their restaurant in Soweto and, tellingly, they tried to “regularise” the payments after the curatorship of VBS by backdating a contract that was never entered into.

Sgameka Projects was an ostensible legitimate company managed by Floyd’s brother Brian Shivambu and “was provided to me by Floyd to make payments that I promised the EFF”, Matodzi wrote in his affidavit.

Matodzi explained how it all came about. At the time, VBS Mutual Bank had granted former president Jacob Zuma a home loan for his Nkandla residence. This created a public storm and “negative publicity arose in the country. Particularly from those that were opposed to Zuma at the time.” 

The EFF was counted among the most vociferous critics of the VBS loan to Zuma, and Malema campaigned on stage against VBS at political rallies.

“As chairman of VBS, I then decided that Malema and EFF should be approached for VBS to explain its position and how the loan was granted.”

A meeting “with Julius at the EFF’s penthouse in Sandton around April/May 2017” was arranged. There is no deed document registered to the EFF that suggests the party owns a penthouse in Sandton, Daily Maverick can confirm. (Journalist Jacques Pauw did publish in his book Our Poisoned Land that Malema had access and at times full use of tobacco baron Adriano Mazzotti’s penthouse at the Raphael Penthouse Suites in Sandton.)

Nevertheless, Matodzi says that at the penthouse were Malema, Floyd Shivambu and Marshall Dlamini. “Dlamini did not participate in the meeting, and he was seated far from where the engagement took place”, Matodzi writes.

Matodzi’s version is that he explained to Malema and Shivambu that their political rallies were embarrassing and damaging to VBS and that “as black brothers, the EFF’s constituencies were VBS target market also”. 

Then Matodzi swung the vociferous VBS/Zuma critics in his favour: 

“I further informed them that VBS was willing to offer a donation to the EFF. I then proposed that VBS can donate R5-million immediately once a bank account has been opened at VBS and R1-million per month to the EFF. I also made it clear that the amount could only be deposited into a VBS account, and that EFF should therefore open a bank account with VBS.”

Sgameka Projects’ sole bank account was registered with VBS Mutual Bank. From Daily Maverick’s investigation, it is clear that the company never traded and never received any other income except from various companies linked to VBS. 

After the penthouse meeting, “Floyd and I remained in contact”. 

Floyd Shivambu later contacted Matodzi to confirm that an account at VBS had been registered “in the name of a company called Sgameka”, Matodzi said.

“A transfer of R5-million as promised was made on my instructions from Malibongwe to Sgameka on 8 June 2017. Subsequent payments were made to Sgameka VBS account every month and were paid from Vele or any of Vele’s subsidiaries. (sic)”

Matodzi’s testimony further creates a problem for Malema and Shivambu in that he paints them not as unknowing and naive participants, but as people who made a concerted effort to plan how the money would be safeguarded from prying eyes in the EFF.  

According to Matodzi, Malema and Shivambu knew that the funds they received into their front company Sgameka Projects were not kosher: 

“Myself, Julius and Floyd understood that concept of donation to mean gratification hence Floyd and Julius did not provide me with EFF’s own banking details for these ‘donations’.”

There were “further subsequent meetings … held between Julius, Floyd and myself”, Matodzi said, and a “notable” incident was when Malema and Shivambu “informed me that they needed funding to renovate an EFF restaurant called Grand Azania in Soweto”.

When Daily Maverick wrote the first article of the Shivambu’s receiving VBS loot in October 2018, the groundworks for the Grand Azania restaurant had already started. Our investigation has shown that VBS funds were funnelled through fronts towards the building works. “Grand Azania” became a problematic name, and Malema and Shivambu decided on Sud — a restaurant in the bustling Vilakazi street, just up the road from where former president Nelson Mandela lived in Soweto. 

Matodzi said he gave Malema and Shivambu the name of David Nthlokwe, a general manager at VBS, who would oversee a “loan”.

“This loan application was made through Sgameka and was approved although I do not know the amount.”

Daily Maverick’s investigation has shown this was a R4-million business loan and it was never paid back. One of the methods in which VBS managers regularised bribes was to offer “loans” which would never be paid back. In this case, instalments on the R4-million “loan” were never made. 

Matodzi and other sources suggest that panic ensued when VBS was placed under curatorship in early March 2017 — also among the EFF leaders. The Reserve Bank was peeking over Matodzi’s shoulder and prying open the bank’s secrets, an act triggering several meetings between Matodzi and the brothers Shivambu, Floyd and Brian, at Floyd’s residence in Bryanston (the rent for which, Daily Maverick can confirm, was paid for in part with VBS loot).

“This was the first time I met Brian”, Matodzi stated. Brian Shivambu was in an invidious position where he was roped into a financial crime and when VBS Bank imploded, he became the face of the money channelled to his brother and Malema.

Further indicating knowledge of their misdeeds, Matodzi says he and Shivambu attempted to “regularise” the VBS loot unlawfully flowing to Sgameka Projects.

“At one of the meetings,” writes Matodzi, “myself, Floyd and Brian agreed to regularise the R5-million plus R1-million monthly donations. It was agreed amongst us that we draft a contract between Vele and Sgameka for consulting work in petroleum and storage facilities. The said contract which we backdated by agreement, was drafted by the Shivambu brothers”. DM

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