Embattled African National Congress (ANC) Limpopo treasurer general Danny Msiza has stepped down from his position just hours after court papers were filed showing how he personally benefited from wide-scale fraud at VBS Mutual Bank.

In a letter addressed a letter to ANC secretary general Ace Magashule on Tuesday, seen by News24, Msiza confirms his decision to "step aside".

This comes in the wake of a resolution taken by the party's National Working Committee confirming the integrity committee's report, which recommended that Msiza should vacate the position.

Msiza was implicated in the VBS scandal as he had allegedly used his political influence to convince mayors and municipal officials from at least 10 Limpopo municipalities to invest hundreds of millions of rands in now collapsed bank.

These investments were unlawful, as municipalities could not invest with the mutual bank. National Treasury also issued an instruction note to municipalities to stop them from investing funds.

On Tuesday, Vhembe district mayor Florence Radzilani also resigned amid allegations of her involvement in the VBS saga. She is also the deputy chairperson of the ANC in Limpopo, and has been asked by the party to vacate the position.

She allegedly received R300 000 in exchange for Vhembe investing R300-million in the bank.

Six other mayors also implicated in the VBS scandal have been asked to resign as well, the ANC in Limpopo announced on Tuesday.

Several of these Limpopo municipalities are struggling to recover financially following the SA Reserve Bank's decision to place the bank under curatorship in March this year. In November the North Gauteng High Court issued a final order to liquidate the bank, which meant that the funds being held by the bank were effectively frozen.

"I do this not as an admission of guilt on my part on matters relating to VBS, but rather with a clean and clear conscious that there is absolutely nothing untoward I have committed," Msiza's resignation letter reads.

Msiza reiterated 'the support he had given to VBS which was "inspired by our over-arching drive to promote meaningful transformation within the financial services sector" and maintains that he could not be held accountable for the transgressions of the VBS executives.

On Tuesday News24 revealed that Msiza had obtained a questionable mortgage loan from VBS worth R9.5-million, in the name of Mojovax – a company of which Msiza and his wife were the sole directors.

This was revealed in court papers filed by advocate Terry Motau SC in response to a court bid by Msiza to have parts of Motau's report deleted or expunged.

Motau, whose report is titled " The great bank heist" , was mandated to investigate the financial misconduct which led to the collapse of VBS. He found that the executives of the bank had looted more than R2-billion from the bank.

Motau's latest court papers have revealed that a company belonging to former ANCYL Limpopo president Kabelo Matsepe – Moshate Investments – had paid at least R716 000 towards the repayments on Msiza's bond.

Matsepe was identified by Motau as a key middleman between municipal officials and VBS. Matsepe's company was paid R27-million in commissions for his facilitating the investments in VBS.

He allegedly in turn would insure the officials – which included mayors and municipal managers – would get paid, also in return for the cash investments.

"My direct financial interface with the bank [VBS] is a legitimate commercial property loan (not a home loan) which I have prepaid until January 2019. The source of the funding is perfectly legitimate," Msiza's letter reads.

Msiza further bemoans the "gross injustice" he has been subjected to by Motau, arguing he was never given a right to respond to the allegations against him.

"Instead, over a period of nine months I have been subjected to deliberate and selective media leaks in the course of his [Motau's] investigation. Even after all these, he still failed to afford me the opportunity to answer allegations levelled against me."

Msiza expressed his confidence that a court of law would prove his innocence and alluded to "threats by law enforcement".

"Hence my decision to approach the court to seek justice in the midst of outright abuse of public power by Adv Motau," Msiza adds.

Msiza added that over and above his position in the ANC he was "an entrepreneur with a broad corporate portfolio and consequently extensive relations in the corporate sector".

"The misplaced assumption by Adv Motau that these are premised only on VBS will elaborately disproved in a court of law."

Msiza concluded the letter by thanking President Cyril Ramaphosa and the "entire membership of the ANC for the honour and privilege to serve our glorious movement".