CAPE TOWN, Oct. 31 (Xinhua) -- South Africa's opposition Democratic Alliance (DA) on Wednesday laid criminal charges against Minister of Cooperative Governance and Traditional Affairs Zweli Mkhize for his alleged role in the VBS Mutual Bank scandal.
The DA accuses Mkhize of siphoning 2 million rand (about 138,000 U.S. dollars) as "donation" from VBS Mutual Bank in 2016 during his tenure as treasurer-general of the ruling African National Congress (ANC) in return for his help in raising funds from municipalities and state institutions.
Mkhize rejected the allegations, saying he had never assisted VBS in securing any funding from municipalities or any other state institution.
The DA said Mkhize violated the Prevention of Organized Crime Act (POCA), which stipulates receiving kickbacks from any financial institution for political purposes as "unlawful activities."
This explains why there was little action taken by Mkhize to intervene in the several municipalities that lost money to the VBS heist, said DA Shadow Minister of Cooperative Governance and Traditional Affairs Kevin Mileham.
"The minister must do the right thing and resign as he has clearly failed to fulfill his duties as minister and has seemingly breached his oath of office," Mileham said.
The looting of VBS will continue to impact service delivery for a long time, he said, adding that many people nearly lost their life savings and the families of the bank's retrenched employees have lost a valuable source of income.
"It is now in the hands of the police to investigate these charges to ensure that the minister be held accountable for any wrongdoing," said Mileham.
Also on Wednesday, Mkhize refuted allegations that he had received donation money from the VBS Mutual Bank in exchange for doing favor for the bank.
"If any financial contribution was made to the ANC by VBS or any other company, this would have been without any influence or commitment from the ANC to do favors," Mkhize said.
Mkhize said he, in his capacity as former ANC treasurer-general, had never assisted VBS in securing any funding from municipalities or any other state institution.
Mkhize is seen as the main figure embroiled in the VBS Mutual Bank scandal, in which up to 900 million rand (about 62 million dollars) in deposits at the bank could not be traced due to alleged irregularities. Much of the money was deposited by ANC-run municipalities.
In a report released in early October, the South African Reserve Bank (SARB) identified 50 people associated with the ANC and the Economic Freedom Fighters (EFF) who allegedly used their political influence to ransack and defraud the bank.
As one of South Africa's smallest lenders, VBS has operated as a licensed mutual bank, funded by its members, for 25 years.
The lender, which isn't listed, gained attention in 2016 when it gave then president Jacob Zuma a mortgage to settle a Constitutional Court order to repay taxpayers some of the money spent on upgrading his private residence.
The bank operates six branches across the country and calls itself a black-owned specialist corporate-finance and retail bank. Its total assets were 2.4 billion rand (about 166 million dollars) at the end of December last year, according to the most recent central bank data.
The bank has been put under administration since April due to severe liquidity crisis.
