Former Thulamela municipal manager pleads guilty over R30 million VBS Mutual Bank investment

Picture: Screengrab

Picture: Screengrab

Published Oct 16, 2023


Former Thulamela municipal manager, Hlengani Maluleke, was arrested for investing R30 million of municipal funds in the VBS Mutual Bank was slapped with a suspended sentence at the Polokwane Specialised Commercial Crimes Court.

National Prosecuting Authority spokesperson in the Limpopo division, Mashudu Malabi-Dzhangi said Maluleke, 53, was sentenced to five years of imprisonment, wholly suspended for five years, after the State entered into a plea and sentence agreement with him.

Maluleke pleaded guilty to contravening the Municipal Finance Management Act (MFMA).

Maluleke, who was out on R30,000 bail after he was arrested by the Directorate for Priority Crime Investigation, known as the Hawks, in February 2022 for his role in the approval of an unlawful investment in VBS Mutual Bank since VBS was not a bank as defined in the Banks Act.

"The Thulamela municipality did not suffer any loss or prejudice. The R30 million investment matured and yielded an interest amounting to R735,542.50. The investment and the interest were then paid back to the municipality," she said.

The investigations revealed that the municipality had illegally invested an amount of R30 million into VBS for a period of three months.

The chief financial officer (CFO) did not recommend that the money should be invested with VBS, instead he recommended Standard Bank.

On December 23, 2016, Maluleke overruled the recommendation of the CFO and authorised the opening of an interest-bearing three-month fixed deposit account in the name of Thulamela municipality, as a result of political pressure.

"By so doing, the accused did not take reasonable steps to ensure that the resources of the Thulamela municipality was used effectively, efficiently, and economically and acted in a grossly negligent way in contravention of MFMA," she said.

Malabi-Dzhangi said the State brought an application for the separation of the trial.

Maluleke's co-accused, Avhashoni Tshifhango, would appear in Polokwane Specialised Commercial Crimes Court CCC on January 29 next year for trial, he is facing one count of corruption.