Absa: Mkhwebane ignored or misunderstood submissions on Bankorp issue
Absa Bank has confirmed that it is going to court to challenge Public Protector Busisiwe Mkhwebane's report and its findings.
The bank also says that advocate Busisiwe Mkhwebane's recommendation that the mandate of the Reserve Bank be changed poses a very serious risk to the financial system and cannot be allowed to stand.
Absa says that it also has unjustifiably been denied access to the documents used by Mkhwebane to come to her decision.
Earlier this week, Mkwhebane said that Absa must repay over R1 billion used to bailout the Bankcorp group during the apartheid era.
In a new statement, Absa Bank says that Mkhwebane’s findings are irrational in that she first accepts most of the conclusion of the earlier Davis Panel investigation into the bailout, but then comes to a different finding.
It also says that she has refused to give them access to the documents that were used to come to her conclusion and that this makes her findings unfair.
Absa says that her previous provisional report also quoted testimony from then Reserve Bank Governor Chris Stals but she has now appeared to abandon that testimony without saying why.
It’s confirmed, that it is going to court to challenge her report and its findings.
ABSA CLEARS THE AIR
Absa earlier responded to the Public Protector's report, saying that while it is still waiting to study the Public Protector’s full report, it doesn’t believe it owes the central bank any money.
It says the Reserve Bank helped Bankorp from 1985 until 1992 when Absa bought it while the assistance agreement remained in place until 1995 with Absa as the new beneficiary.
The bank says the customer debt write-offs that resulted from the Reserve Bank’s intervention were taken into account in determining the price Absa should pay for Bankorp. The price was R1.23 billion and was paid directly to Bankorp shareholders which is why Absa should not be expected to pay again.
Absa insists that the money did not go to Absa shareholders, it instead was used to write off the debts of Bankorp customers.
The bank says after reading the Public Protector's full report it will consider its options which may include a judicial review.
FUNDS BELONGED TO THE PEOPLE OF SA
Mkhwebane in her report says that the funds given to Bankorp belonged to the people of South Africa.
“Failure to recover the gift resulted in prejudice to the people of South African as public funds could have benefitted the broader society instead of a handful of shareholders of Bankorp and Absa.”
She says the conduct was contrary to the Constitution.
“The conduct of the South African government and the South African Reserve Bank goes against the ethos read in the preamble of the Constitution and Section 195 of the Constitution in respect of redressing social injustices and promoting efficiency.”
The Special Investigating Unit has been tasked with recovering the funds from Absa Bank.