Absa, public protector in court over apartheid-era bailout

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The ABSA Bank in Sandton Photo: Zacharia Mashele

The ABSA Bank in Sandton Photo: Zacharia Mashele

WEB_PHOTO_ABSA1_260917

The ABSA Bank in Sandton Photo: Zacharia Mashele

The ABSA Bank in Sandton Photo: Zacharia Mashele

JOHANNESBURG - The case involving an apartheid-era bailout of Absa is to kick off in the high court in Pretoria on Tuesday.

Absa, the SA Reserve Bank and the National Treasury want the recommendations made by Public Protector Busisiwe Mkhwebane overturned.

But her lawyers will argue that her findings on the bailout are legally binding. She recommended that Absa pay back R1-billion. 

From 1985 to 1992 the Reserve Bank gave "lifeboat" loans to apartheid-era bank Bankorp.

In 1992 Bankorp became part of Absa. 

The Reserve Bank continued to help Absa until 1995.

In 1997, British asset-recovery firm CIEX offered to investigate apartheid plunder for the new government. Former British intelligence agent Michael Oatley ran the company.

READ: Ciex spy says it was ANC leaders who didn&39;t want to recover Absa bailout

CIEX identified billions of rands laundered by arms dealers as well as apartheid-era bankers and politicians.

The money trail then seemed to go cold until 2011, when then-Public Protector Thuli Madonsela announced she was investigating.

Her term ended before the report was finalised, and in June 2017 her successor, Mkhwebane, filed her own CIEX report.

She found that the Reserve Bank had acted improperly, and recommended that the Special Investigating Unit recover more than R1-billion from Absa.

Mkhwebane instructed Parliament to change the Reserve Bank’s mandate.

 

READ: Where did we get findings on Absa/Bankorp wrong?: Judge Davis

In August, the North Gauteng set aside her instruction.

Constitutional law expert Pierre de Vos said Mkhwebane had no right telling Parliament to amend the Constitution, and how to amend it.

"Not even the Constitutional Court can do that,” he said.

Sceptics see her Reserve Bank recommendation as the true motive behind the report.

“The political context is the complicating matter here," said political analyst Aubrey Matshiqi. "It is a context of a narrative in which, on the one hand, for the better half of 2016 there were allegations of state capture. Now, as to who is doing the capturing depends on the vantage point.”