VBS Mutual Bank and Altron linked to R400-million set-top box tender

A City Press report said corruption-plagued VBS Mutual Bank was set to become a conduit for a R400-million tender to supply set-top boxes in South Africa.

According to the report this would be achieved by partnering with Altron division Arrow Altech Distribution (AAD).

VBS Mutual Bank was planning to give AAD bank guarantees to procure “knocked-down set-top box kits from French multinational SmartDTV”.

AAD would then supply these set-top boxes to a black women-owned company, which in turn would supply them to the SA Post Office for distribution to poor households.

The City Press said the plan was for the black women-owned company to pay Arrow Altech Distribution for the boxes with funding from VBS Mutual Bank.

This report from the City Press was partly based on a presentation by Altron to a prospective partner which contained the VBS Mutual Bank plan.

Altron refutes allegations

In response to questions from MyBroadband, Altron said it refutes allegations from the City Press that it pitched VBS Mutual Bank to a BEE partner as a conduit for a R400-million tender to supply set top boxes to the government.

Altron said Peter Griffiths, MD of AAD at the time, made the presentation “which illustrated a potential model for the BEE partner’s participation in the USAASA opportunity which was due for publication in 2017”.

“The model included VBS Mutual Bank which had funded two other customers of Altron Arrow – Temic and Lerata Dima – in the previous USAASA tender,” said Altron spokesperson Zipporah Maubane.

“Altron Arrow played no part in securing funding for these two companies. VBS Mutual Bank was used as a possible funder for purposes of the presentation – this could have been any other bank.”

Maubane added that the proposal did not go any further because USAASA did not issue the tender.

“Altron Arrow does not have dealings with VBS Mutual Bank,” said Maubane.

VBS Mutual Bank Corruption

VBS Mutual Bank has made headlines in recent weeks after it emerged that corrupt officials looted R2 billion from the bank.

Many politically-connected people were linked to corruption, which is seen as the biggest bank heist in South Africa’s history.

The corruption was so damaging to the bank that the South African Reserve Bank’s Prudential Authority applied for VBS to be liquidated, saying that there is no hope of it being saved.

The SARB said that VBS is “hopelessly insolvent” and massive fraud has been perpetrated against it.

“As a result, there is no prospect of entering into any resolution plan in respect of VBS,” it said.

Previous set-top box investigation into Altron

The latest report follows a 2017 investigation by the Competition Commission into three Altron subsidiaries and 12 other businesses in a set-top box tender.

According to a Sunday Time report, former President Jacob Zuma’s son was involved in Altron subsidiary Altech UEC, which was raided by the Hawks.

13 companies were raided as part of an investigation by the Competition Commission into collusion relating to a R5-billion digital TV set-top box tender.

The report said Zuma’s son Mxolisi was offered a R54-million bribe to influence the government contract.

We are not guilty – Altron

In February Altron said an independent investigation into a 2014 tender process confirmed that its adhered to due process.

Subsequent to the Competition Commission inquiry, Altron said it appointed Bowmans, an external legal firm, to conduct an independent investigation into the allegations.

“Bowmans has subsequently finalised its investigation into the Altron subsidiaries’ alleged collusion in the award of the DTT tender,” Altron said.

“In their opinion there was no anti-competitive conduct on the part of these entities, particularly with regard to tender collusion and/or price fixing.”

The Altron board said it is satisfied with this finding and “again confirms that Altron obeys the laws and regulations of all countries in which it operates”.

Now read: Zuma’s son, the Hawks raid, and the R54-million bribe

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VBS Mutual Bank and Altron linked to R400-million set-top box tender