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This is what Advocate Willem Heath told Sake on Wednesday. Two years ago Heath, then a judge, had to investigate the Bankorp saga. On Wednesday he responded to the report by the panel of experts under the chairmanship of Judge Dennis Davis, which was released at the South African Reserve Bank on Tuesday.
In the report by the Davis panel, it was found compensation for the approximately R1.2 billion lifeline is not practical. Apart from the cost, the reason given was the legal maze which would lead to a drawn-out litigation process.
Davis's team also found that Absa did not really benefit from the aid package, but that Sanlam's policyholders and Bankorp's minority shareholders derived the greatest benefit.
Heath, who said he did not disagree directly with everything said in the Davis report, specifically pointed out that he held talks with banking experts from America, Germany, France and England, as well as with South African banking officials.
These experts agreed that compensation claims would undoubtedly lead to a rush on Absa, which in turn could disrupt the rest of the South African banking system.
Heath says the latter is the main reason why compensation could not be claimed in the illegal Bankorp transaction. He insists Sanlam, Absa and the Reserve Bank should have been charged for their share in the Bankorp saga.
"An order should have been issued against the Reserve Bank for the role it played in a transaction where it operated outside its powers. Not to claim money back from the central bank, but indeed for the role it played in the transaction," Heath said.
He said his report was completed after its investigation unit obtained hard evidence from several people, while the Davis report was drawn up by a panel which combed through previous reports.
According to Heath, Absa acquired certain rights and commitments in the Bankorp transaction. In an illegal transaction, the benefits obtained must also be repaid.
He criticised the government and the Reserve Bank, because no official code has been compiled on lifelines to struggling banks. He recommended two years ago, that such a code should by introduced immediately, so that the commercial banks and the public know exactly which steps are being taken.
Also no legislation has been introduced that deposits in the country must be insured by the private sector. "This is something one gets in the First World, as well as in certain Third World countries."
Heath says a system should come into operation as soon as possible to make deposit insurance legally enforceable, which could lead to large insurance groups such as Lloyd's of London entering the market for deposit insurance.
When Davis's panel of experts met initially to compile the report, he said he would draw up a code for lifebelts to banks, but this did not happen, Heath said.
* The Reserve Bank has announced that the Regal report by Adv John Myburgh, who is also leading the investigation into the devaluation of the rand, will be announced on Thursday.
