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Cape Town – The Land Bank has to pay R3.26m to five farmers
owing to erroneous interest calculations and illegal administrative fees.
Schalk Botha of Botha Coetzer Smith Attorneys, who has filed
a case in the North Gauteng High Court and currently represents more than 500
farmers, said this is probably the forerunner of many more complaints against
the Land Bank.
The five had to pay compound rather than simple interest on
loans from the Land Bank, as well as administrative fees for which no provision
was made in their loan agreements.
In his verdict Judge WRC Prinsloo said on Friday that the
points of contention between the farmers and the bank revolved around the
interest rates that the Land Bank had been applying for years, and the method of
calculating the interest.
In the hearing, corruption and mismanagement on the part of
the Land Bank were advanced as reasons why the bank had increased interest
rates without linking them to the prime lending rate.
From the heads of the analysis of the testimony and other remarks that he made, the judge came to the conclusion that the weight of evidence indicated that profound and significant agricultural changes had had a major impact on the operations of the Land Bank and its ability to fulfil its traditional role as the funder of agriculturists.
This is according to the judge’s written
decision, which went on to refer to clear indications of corruption and
mismanagement in the reports by Deloitte and others, and he could not find that
these were the main reasons for the Land Bank’s decisions to adjust its
interest rates from time to time.
Judge Prinsloo’s conclusion about the calculation of
interest on loans is that the contract entered into with the plaintiffs only
makes provision for simple interest and not for calculating interest on
interest.
Interest on the amount to be repaid to the farmers is
determined at 15.5% from the day on which the summons was signed (June 10 2010)
to the date on which the money is paid. Prinsloo also ordered that the
costs of two advocates and specialist witnesses, Dawie Roodt and Polla Whelpton,
be paid.
In a separate dictum Prinsloo also found that the Land
Bank’s allegation that the claims submitted had prescribed did not hold water.
During court proceedings last year Wolf Meyer, the then Land
Bank financial director, recalculated more than 1 130 accounts and had made
adjustments worth around R11.4m.
From other evidence before the court it appeared that the
Land Bank had repaid R25m-odd to borrowers. Many of the repayments had been the
result of settlements reached between farmers and the bank.
Botha said he
advised farmers who suspected that their calculations were incorrect to give
urgent attention to them as there is a three-year cut-off date.
- Sake24
For more business news in Afrikaans, go to Sake24.com.
