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African Bank to challenge R300m fine

Feb 13 2013 13:36
Gavel

(Picture: Shutterstock)

Company Data

AFRICAN PHOENIX INVESTMENTS LIMITED [JSE:AXL]

Last traded 1
Change 0
% Change 0
Cumulative volume 2560822
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - SA's largest unsecured lender, African Bank Investments [JSE:ABL] has threatened to take the National Credit Regulator to court should the National Consumer Tribunal agree to the regulator's proposal of a R300m fine for fraudulent lending.

Business Day reported that African Bank is contesting a fine related to the manipulation of the bank's "affordability calculations" which affected "397 customers and loans to the capital value of R15.5m".

After an internal investigation three agents were dismissed for fraud when it was discovered that they colluded with customers and made illegal payments to agents in return for granting the loans, the report said.

The National Credit Regulator recommended that the National Consumer Tribunal impose a R300m fine, which is possibly the largest proposed sanction in the credit regulator's history, Business Day said.

African Bank CEO Leon Kirkinis told the publication there were complex syndicates that "fraudulently designed pay slips, bank statements and identity documents to manipulate affordability calculations".

He said the bank was not in the business of lending to "people who can't afford".

African Bank has about 40% of the total outstanding unsecured credit granted in the country.

African Bank shares were up 1.60% to R31.04 in midday Wednesday trade.  

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