Two former Public Investment Corporation (PIC) executives who sat on the VBS board have been banned by the Financial Sector Conduct Authority (FSCA) an inquiry heard on Monday.

Felicity Mabaso, the regulatory authority's divisional executive for licensing and business centre, revealed that it had taken action against the individuals following a forensic report into the mutual bank's collapse.

She was testifying before the judicial commission of inquiry into the PIC. 

Mabaso said PIC executives linked to the VBS scandal have been debarred from the financial authority in a process that was initiated by the PIC.

Although Mabaso did not mention the names of the individuals during her submission, Paul Magula and Ernest Nesane were the two PIC executives who represented the asset manager in the VBS board.

"We have investigated VBS Bank and the matter is at finalisation stage ... and the two people who have been implicated in VBS have already been debarred from the financial sector conduct authority," she said.

The ban does not carry a specific period of censure, and the persons found guilty may reapply to have it lifted.

In the event of application for re-admission, the body is required to "interrogate the application" to ascertain whether the concerned individual has been rehabilitated.

Magula, the former head of risk and compliance at the PIC, admitted to investigators that he accepted gratuities from the collapsed bank through Vele in return for turning a blind eye to its illegal activities.

However, in his testimony before the PIC inquiry last week, he denied any knowledge or participation in any illegal or fraudulent activities during his time as a VBS board member.

He was fired from the PIC in April 2018. His former colleague, Ernest Nesane, a former head of legal counsel‚ governance and compliance‚ resigned in July 2018 amid allegations of impropriety.

No sign of irregularities 

During her submission on Monday, Mabaso stated that the FSCA often conducted on-site visits to the PIC, to assess compliance with the financial service regulations.

"The compliance reports submitted to the FSB/FSCA over the period in question did not indicate any issues of non-compliance or other regularities that required action to be taken," she said. 

The period in question was between January 1 to June 30 and again from July 1 to December 31.