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International banks should bear responsibility for state capture - Hain

Former British politician Lord Peter Hain testified at the Zondo commission on the role international firms played in the fraud and corruption that took place in the public sector over the past decade.

Former British politician Lord Peter Hain testifying at the Zondo Commission on 18 November 2019. Picture: SABC Digital News/YouTube.com

JOHANNESBURG - Former British politician Lord Peter Hain on Monday testified at the Zondo Commission that international banks that had granted looters access to global networks to launder money were also to blame for state capture in South Africa.

Hain testified at the commission on the role international firms played in the fraud and corruption that took place in the public sector over the past decade.

He insisted that the corporates he referred to as international actors helped corrupt individuals in South Africa create complex structures to disguise the true ownership of funds.

Hain said global banks, HSBC, Standard Charter and the Bank of Baroda, who were said to have allegedly assisted the notorious Gupta family were culpable for the capture of the state.

“For international banks to claim they have no responsibility is frankly disingenuous and they should be held accountable for the consequences of accounts which have money that is smuggled,” he said. “The banks concerned did not stop it and they are culpable, in my view, to state capture, the corruption and looting.”

He testified that although his plea was for the international community to address what he called a “sorry and sordid saga," he would also focus on necessary domestic changes.

Hain said the international actors helped corrupt individuals to enjoy the spoils of their illegality by allowing them to move their ill-gotten gains from South Africa.

**STATUTORY BODIES TO FIGHT CAPTURE **

Meanwhile, Hain called on the South African government to set up policy and good practice management agencies within 12 months to deal with money laundering.

He said South Africa had to move with urgency to establish the statutory bodies he suggested because state capture was not yet a thing of past.

“Well placed senior people told me that the problem is continuing, amongst others, that there could be a tendency to say ‘we deal with the Gupta problem and then we dealt with the whole thing’ when actually is just the largest iceberg in a lake of many icebergs of corrupt practice.”

Hain said he was concerned that the country was not moving fast enough to recover stolen funds and assets.

He said even with the capacity problems faced by the National Prosecuting Authority, some alternatives could be explored.

“I think the banks and the professional enablers are therefore the first line of defence when it comes to corruption and a private-public sector partnership; I think it’s integral to reducing financial crimes,” Hain said.

The policy and enforcement alternatives suggested by Hain were already in force in the UK.

WATCH: Lord Peter Hain testifies at Zondo Commission

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