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Cooperative Governance and Traditional Affairs minister Zweli Mhkize has denied allegations that he was behind the unlawful depositing of millions of rands into VBS Mutual Bank during his time as ANC treasurer general.
This follows allegations by the leader of the United Democratic Movement (UDM), Bantu Holomisa, that Mkhize was central to "instructions" given to municipalities that they should defy regulations and the Municipal Finance Management Act, and deposit their money into the bank.
Mkhize gave an interview to the SABC on Monday, in which he said he had met with the owners of VBS just like he had met with the owners of all other banks, especially black-owned financial institutions. He said the context of these talks was an instruction by Luthuli House to investigate a state-owned bank, as well as the transformation of the financial services sector.
"This is the context of the meeting. There was never a meeting where I discussed the issue of getting investment for VBS from municipalities," he said.

In an interview with eNCA on Saturday, Holomisa said there must have been an instruction from someone in the ANC for the municipalities to invest with VBS.
He reportedly said:
"The question is, who gave the authority for the municipalities to go and invest in that bank, because they have no treasury authority. The Municipal Act doesn't allow it, the Financial Act doesn't allow that, the question is where did they get the approval. But shortly, I am sure, people will read in newspapers as to where this presentation was made to loot or target the PIC, to target certain municipalities and to target certain SOEs."
Holomisa hinted that local government minister and former ANC treasurer general Zweli Mkhize was involved.
The UDM leader reportedly said this was part of a wider conspiracy to loot the Public Investment Corporation (PIC) and state-owned enterprises (SOEs). He wrote a letter to President Cyril Ramaphosa asking that the allegations be investigated.
Holomisa has already received one threat of legal action from Lebashe, a firm that Holomisa said was "in bed" with the PIC, giving it access to funding, according to Business Day.
At the weekend, the Sunday Times reported that Venda King Toni Ramabulana is to receive a herd of cattle from the directors of the owner of VBS, Vele Investments, as an apology for the embarrassment caused by the latest exposé, that millions were looted from VBS and luxury items purchased for the king.
Ramabulana is reportedly a shareholder in the bank, along with the bank's former chairman and Vele Investments founder Tshifhiwa Matodzi, and Vele Investments CEO Robert Madzonga. Vele Investments is the bank's largest shareholder.
It is alleged the trio used hundreds of millions in depositors' funds to pay for their lavish lifestyles, which have included a helicopter for the king, luxury apartments, designer clothing and sports cars. This was reportedly done through a series of vehicle finance deals, mortgage bonds and complex intercompany loans between VBS, Vele Investments and its subsidiaries.
It is estimated that R1.5-billion was looted from the bank – money that was unlawfully invested by municipalities.
According to City Press, Vele appears to have used VBS to prop up its other businesses.
In February, the Reserve Bank placed the bank under curatorship citing liquidity concerns.
A source close to the curators told City Press:
"The guys at VBS used depositors' money to fund Vele's expansion. If you look at the books closely, you will soon discover that there are three ways in which the bank's money disappeared. People simply didn't pay their home loans, overdrafts and vehicle loans. But also, some of Vele's subsidiaries ran their day-to-day business through large VBS overdraft facilities and complicated intercompany loans. It was like a Ponzi scheme that was eventually going to fail."
According to Business Day, Mkhize said those municipalities that invested with VBS will have to restructure their budgets to ensure that there were no funding shortfalls because of the missing money. He said that the Reserve Bank had indicated there was little hope of reclaiming the money, and said he hoped the investigations would be expedited so that the guilty parties could be brought to book.
On Monday, the ANC called for law enforcement agencies to investigate the problems at VBS, and labelled the saga a "sorry state of affairs", according to Eyewitness News (EWN).