An insurance group destroyed by its exposure to VBS Mutual Bank is going into liquidation – potentially destroying any hope of recovering R86m in policies belonging to more than 63 000 truck drivers. A City Press report says the Transport Sector Retirement Fund (TSRF) is the last major client of Bophelo Insurance Group, which last year lost R114m it had invested at VBS, instantly rendering it insolvent.

Conflicting claims about dodgy deals and disappearing millions have now been made in court papers, with even the ownership of Bophelo seemingly being contested.

Bophelo was 70% owned by Vele Investments, the owner of VBS, and apparently got raided to plug the hole Vele had created in VBS’ books until the whole group collapsed, says the report.

In April last year, Bophelo had already been barred from conducting any new insurance business. Curators were appointed in October after recapitalisation attempts failed, and now the Prudential Authority – a division of the Reserve Bank tasked with regulating banks and insurers – has brought a liquidation application before the Gauteng High Court (Pretoria) because there is ‘no reason for its continued existence’.

The TSRF is, however, opposing the liquidation, as is Lebashe Investment Group, a company that reportedly bought 70% of Bophelo from Vele for R1 last year and briefly lent it R100m before reclaiming its money, leaving Bophelo still insolvent.

The loan was withdrawn after it became clear that Vele might get liquidated and the money in Bophelo might not be safe.

Full City Press report