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Absa report: Rupert calls it fiction, Stals misquoted

Jan 18 2017 09:30

Cape Town – The public protector’s leaked interim report that recommends Absa pay back the South African Reserve Bank (Sarb) an outstanding interest of R1.225bn is being ripped apart by the seams.

The report was based on an investigation by UK company Ciex in 1997 which probed claims that the Bankorp group of banks, bought by Absa in 1992, had been offered R1.5bn under the guise of a bailout before the dawn of democracy.

Absa criticised the report for not taking into account the report by the Davis panel of experts in 2000 commissioned by former Sarb governor Tito Mboweni, which says Absa does not owe any more money.

There is a chance that the final report’s findings may still being changed, Public Protector Busisiwe Mkhwebane told Mail & Guardian, which broke the story last week after gaining access to the leaked report.  

Mkhwebane has since laid criminal charges with the police over the leaking of the draft Absa report, her office said on Tuesday. Her office also told Business Day that it had sent the confidential interim report in full to Absa, the Treasury and the Sarb by mistake and that it was only meant to send a notice.

The argument that Absa owes Sarb interest on the deal apparently hinges on a quote by former Sarb governor Chris Stals, who said Absa agreed to pay back the interest.

However, he told Business Day deputy editor Carol Paton on Tuesday that he was misquoted and that this was not the case.

“Stals said that the finding, drawn from his interview with (former public protector Thuli) Madonsela, was either willfully incorrect or showed a lack of understanding of how the lifeboat worked,” Paton reported on Wednesday.

"I made it very clear to her in my interview that there (is) no way the Bank can claim anything from Absa. Absa settled all its obligations in 1995 and to think that a successful claim against it can now be made is naïve," he said.

Ciex report is a work of fiction - Rupert

Richemont chairperson Johann Rupert, commenting on allegations that he or his family were involved in the Bankorp deal, told Huffington Post on Tuesday that he welcomed a full inquiry into the matter and said the Ciex report "is a work of fiction".

"I would welcome a full and transparent investigation into the whole thing so we can finally put to rest all the stories and lies swirling around. I would also welcome it so that certain people and groups can apologise for making unsubstantiated accusations," he said from Geneva in Switzerland.

"How and why would government be able to recover money from us? It is also totally untrue that I or my father would have helped facilitate the lifeboat. I was chairman of the board of Rand Merchant Bank (RMB) at the time and Bankorp was the opposition.

"I was in fact livid when the possibility of a lifeboat to Bankorp became known and wrote to the Sarb objecting. I agreed that financial assistance would be necessary if there was systemic threat to the banking system or to the economy, but argued that deposit holders, and not equity partners, should be protected."

Madonsela's role in report

Madonsela did most of the work on the Absa R2.25bn bailout probe by herself because staff were against it and already overworked, she told the Cape Town Press Club on Monday.

The investigation was conducted after Advocate Paul Hoffman approached Madonsela and asked if she had jurisdiction to probe the claims. She believed the office did.

The bank said the premature release of the report is “regrettable”. It said the Davis panel of experts found that Absa’s shareholders did not derive any undue benefit from the Sarb’s intervention, and as such no claim of restitution could be pursued against Absa.

“It must be noted that the matters and events under investigation occurred during the period 1985 to 1995, 21 to 31 years ago,” the bank said in a statement.

“The testimony provided by current Absa senior executives to the public protector was based on records available to the bank’s current management, as none of them have personal knowledge of events at the time.”

Sarb governor Lesetja Kganyago said there are a number of errors in the public protector’s leaked preliminary report. Last week he told Radio702 that the Sarb is going through the report with their lawyers.

“We are checking it for factual accuracy,” he said. “We have already spotted a number of errors. We are going through the report with our lawyers...”

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bankorp  |  absa  |  johann rupert  |  public protector
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