Land Bank overcharged farmers | Fin24
 
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Land Bank overcharged farmers

Mar 09 2012 16:06
I-Net Bridge
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 interest.

In the judgment handed down on Friday, Judge WRC Prinsloo said the Land Bank had charged compound interest from its clients instead of simple interest.

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.

land bank  |  farmers
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