Absa’s R1.125 billion ‘apartheid bailout’ report set aside

The North Gauteng High Court has set aside a report by Public Protector Busisiwe Mkhwebane which ordered that R1.125 billion be recovered from banking group Absa, for government funding given to apartheid era bank Bankorp, which was never paid back.

The Public Protector’s proclamation came after an investigation into a report on apartheid-era looting by UK-based asset recovery agency, Ciex, was submitted to the her office. Mkhwebane released her report in June 2017.

The Ciex report alleged that R24 billion was unlawfully given out to Bankorp (which would eventually become part of Absa) from 1985 to 1992 by the South African Reserve Bank. It then provided Absa with a further R2.25 billion in bailouts from 1992 to 1995.

According to Mkhwebane, the government and the SARB failed to implement the Ciex report, and ordered that the Special Investigation Unit re-open the case and recover the funds.

Ciex was paid 600,000 British pounds for services which were never used by government, the Public Protector said.

Mkhwebane said that two investigations into the matter established that the financial aid given to Bankorp/Absa was irregular, but the correct amount attributable was R1.125 billion.

Both Absa and the SARB opposed the report and took it on review.

In its defence, Absa said that the Davis Panel of experts appointed by former SARB governor Tito Mboweni in 2000 found that Absa’s shareholders did not derive any undue benefit from its intervention, and as such no claim of restitution could be pursued against Absa.

The banks said that the Public Protector had failed to follow procedural fairness in her report, and had failed to meet with the bank to gain clarity on the allegations, while ignoring all evidence put before her on the matter.

The SARB also sought a declaratory order saying that Mkhwebane had abused her powers with the report. This was not granted.

However, in a punitive order, the court set aside Mkhwebane’s report, and ordered that she pay 15% of costs in her personal capacity. The other 85% of costs would be paid in her capacity as Public Protector.


Read: Absa must pay back R1.125 billion for irregular apartheid-era gifts: Public Protector

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Absa’s R1.125 billion ‘apartheid bailout’ report set aside