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Absa Might Have To Pay Back More Than R2 Billion For An Apartheid Bailout

Absa has hit back after a preliminary report written by the Public Protector Busisiwe Mkhwebane was leaked, stating that the bank will have to pay back R2,25 billion.

Although still under investigation, the amount relates to an “unlawful apartheid-era bailout,” explains News24 – but Absa have said that the whole matter is “regrettable”:

The bank said that the Davis Panel of experts appointed by former South African Reserve Bank (Sarb) governor Tito Mboweni in 2000 found that Absa’s shareholders did not derive any undue benefit from the Sarb’s intervention, and as such no claim of restitution could be pursued against Absa.

“It must be noted that the matters and events under investigation occurred during the period 1985 to 1995, 21 to 31 years ago,” the bank said in a statement.

“The testimony provided by current Absa senior executives to the public protector was based on records available to the bank’s current management, as none of them have personal knowledge of events at the time.”

The story broke in today’s Mail & Guardian and revealed that the Sarb, Treasury and the presidency are implicated in the report:

Mkhwebane has provisionally found that the government breached the constitution and the Public Finance Management Act.

However, Mkhwebane told the M&G that the report was preliminary and that she was awaiting feedback from the implicated parties – ‘information which might change the final report drastically’.

Absa also noted that the “public protector has been invited to inspect confidential documents” it has:

These documents pertain to, among others, due diligence performed by Absa prior to acquiring Bankorp.

Bankorp started receiving SA Reserve Bank assistance in 1985. Absa acquired Bankorp in April 1992 at fair value. All the obligations pertaining to the SA Reserve Bank’s assistance were discharged in full by October 1995.

We have written to the public protector informing her that we accept her invitation to make further submissions in terms of the Public Protector Act.

These submissions will correct several factual and legal inaccuracies that are contained in the provisional report. This will be done on or before the deadline of February 28 2017.

Although the saga has been going on for years, here’s a little background:

From 1985 to 1992 the South African Reserve Bank provided assistance to Bankorp and, for the period 1992 to 1995, to its new owner, Absa. After the existence of that assistance belatedly became public knowledge, its nature and validity became the subject of controversy which was not resolved.”

The Davis Panel report concluded that “although the decision to provide financial assistance to Bankorp was, for that reason, justified, the form and structure of Reserve Bank assistance to Bankorp over a decade from 1985 (including its continuation in the form of assistance to Absa) was seriously flawed, when considered as a whole”

And there I was duped into believing Mkhwebane really was going to look into grass-root queries.

Read the full story HERE.

[source:fin24]

This post was syndicated from 2oceansvibe.com. Click here to read the full text on the original website.

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