FORMER Thulamela Municipality manager Hlengani Maluleke (53) has been sentenced to five years in prison for authorising an unlawful investment in VBS Mutual Bank.
Maluleke appeared in the Polokwane Specialised Commercial Crimes Court on Monday, 16 October.
The accused received a suspended sentence of five years, with the condition that he does not commit a similar offense during the suspension period.
The state reached a plea and sentencing agreement with Maluleka, who pleaded guilty to violating the Municipal Finance Management Act (MFMA).
He had been out on R30 000 bail after his arrest by the Directorate for Priority Crime Investigation in February 2022.
The arrest was related to his role in the approval of an unlawful investment in VBS Mutual Bank, as VBS was not categorised as a bank under the Banks Act.
At least 20 municipalities in Limpopo, North West and Gauteng lost nearly R1,6 billion after illegally investing with the now liquidated bank.
According to Limpopo NPA spokeswoman Mashudu Malabi-?Ndzangi, the Thulamela Municipality did not suffer any losses or harm from the investment. The R30 million investment matured and yielded an interest amounting to R735 542,50, which was subsequently returned to the municipality.
"Investigations uncovered that the municipality had illegally invested R30 million in VBS for a three-month period. Notably, the chief financial officer (CFO) did not recommend investing with VBS. Instead, Standard Bank was suggested," she said.
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She said however, on 23 December 2016, the accused overruled the CFO's recommendation and authorised the opening of an interest-bearing three-month fixed deposit account in the name of Thulamela Municipality due to political pressure.
"In doing so, the accused failed to ensure the effective, efficient and economical use of the municipality's resources, acting in gross negligence in violation of MFMA," said Malabi-Ndzangi.
In seeking a harsher sentence, state advocate Hein van der Merwe highlighted that such offenses were prevalent in the area, and the accused was not the only municipal manager who yielded to political pressure and authorised unlawful investments in VBS.
"This misconduct by the accused and other municipalities resulted in a significant public outcry due to losses suffered by innocent clients, including municipalities in impoverished areas," he said.
Ivy Thenga Advocate of the Director of Public Prosecutions welcomed the conviction and sentence, emphasising that it sent a message to public officials that contravening legislative frameworks governing their conduct will not go unpunished.
She also commended advocate Hein van der Merwe, Hilke Meyer, and the investigation team led by Lieutenant-Colonel Anton White from the Hawks.
The state has applied for the trial of accused one to be separated from accused two, Avhashoni Tshifhango.
Tshifhango, the co-accused, is set to appear in the Polokwane Specialised Commercial Crimes Court on 29 and 30 January 2024, facing one count of corruption.
