Absa denies apartheid-era debt


File: Absa

TSHWANE – Absa responded to findings by the Public Protector's office saying that the conclusions made were legally and factually flawed on Monday.

The bank asked the Public Protector to correct the defects they named in the preliminary report before publishing the final version.

They complained the office of the Public Protector did not provide them with requested documents and information and did not inspect documents that they deemed pertinent to the investigation.

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In a statement, Absa said, "The Provisional Report does not address at all the fact that Absa paid fair value when it acquired Bankorp, which value was calculated to take into account the South African Reserve Bank (SARB) assistance i.e.. Absa paid for the SARB assistance to Bankorp and did not benefit therefrom. This was accepted by the Davis Panel."

"Absa did not make a provision in its accounts for the repayment of the interest on the SARB loan to Bankorp because no such liability to repay interest existed," they said.

The bank also named public statements made by Judge Davis, Dr Stals and Judge Heath following the leak of the provisional report contradicting evidence attributed to them in the document calling into question its accuracy on crucial issues.

Absa stated, "the remedies proposed in the Provisional Report are neither practically feasible nor legally competent. In particular, the recovery of any debt allegedly due (which is denied) has long ago prescribed in law. Moreover, we deny any debt is due or payable by ABSA."

Public Protector Busisiwe Mkhwebane on Monday criticised government and the SARB for failing to recover more than one billion rand from Bankorp Limited/ABSA Bank billions advanced as an “illegal gift” to the Bankorp group, which was bought by ABSA in the early 1990s.

“The allegation whether the South African government and the Reserve Bank improperly failed to recover from Bankorp Limited/ABSA Bank an amount of R3,2 billion cited by the CIEX report, owed as a result of an illegal gift given to Bankorp Limited/ABSA Bank between 1986 and 1995 is substantiated,” Mkhwebane told a media briefing in Pretoria.

“The correct amount of the illegal gift granted to Bankorp Limited/ABSA Bank is in the amount of R1,125 billion.”

Mkhwebane added that the South African populace had been prejudiced by government’s failure to recoup those huge sums of money.

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“The amount given to Bankorp Limited/ABSA Bank belonged to the people of South Africa. Failure to recover the ‘gift’ resulted in prejudice to the people of South Africa as the public funds could have benefited the broader society instead of a handful of shareholders of Bankorp Limited/ABSA Bank,” she said.

“The conduct of the South African government and the South African Reserve Bank goes against the ethos laid out in the preamble of the Constitution and section 195 of the Constitution in respect of redressing social injustices and promoting efficiency.”

Mkhwebane said the conduct of government and the SARB constitutes “improper conduct and maladministration”.

For remedial action, Mkhwebane has referred the matter to the Special Investigating Unit, which must in turn approach President Jacob Zuma to reopen the presidential proclamation R47 of 1998 “in order to recover the misappropriated public funds unlawfully given to ABSA Bank in the amount of R1.125 billion”.

The Public Protector has probed allegations that CIEX, a covert United Kingdom-based asset recovery agency headed by Michael Oatley, was contracted by Pretoria to assist in investigating and recovering misappropriated public funds and assets allegedly committed during the reign of the apartheid regime.

“The allegation whether the South African government improperly failed to implement the CIEX report … after commissioning and duly paying for same is substantiated. CIEX Limited was paid 600,000 British Pounds for services which were never used by the South African government. No evidence could be found that any action was taken specifically in pursuit of the CIEX report,” said Mkhwebane.