Johannesburg - The North Gauteng High Court has
ordered the Land Bank to pay R3.6m to five farmers, plus 15.5%
interest per year from the date of summons for the overcharging of
In the judgment handed down on Friday, Judge WRC Prinsloo said
the Land Bank had charged compound interest from its clients instead of
The farmers had sued the bank for the overcharging of interest on their agricultural loans.
The Land Bank also filed special pleas of prescription in
certain matters - accounts that have been repaid by farmers more than
three years prior to the date the summonses had been issued - but the
court ruled that they failed to prove same.
Economist Dawie Roodt testified that he could not find any
market-related reasons why the Land Bank increased interest rates "out
of the norm".
The only "plausible" reason was that the Land Bank's profit
margins and balance sheet came under pressure, partly because of alleged
mismanagement, and the Land Bank increased their interest rates to
"make more money", according to Roodt.
"We were very fortunate to have had the insights of Dawie in
court to explain the workings of the financial markets," said Schalk
Botha, the attorney representing farmers.