What happened at Saambou?

Johannesburg - Johan Myburgh, former chief executive of Saambou, as well as Charles Edwards, former executive director, were excluded from all at Saambou when Investec presented is intervention plan to the Reserve Bank shortly before Saambou was placed under curatorship.

This led to David Lawrence, chairperson of Saambou, ordering Myburgh and Edwards not to come to the office anymore as of February 8, the day it was decided to place Saambou under curatorship.

Although the Financial Services Council investigation into Myburgh and Edwards' suspicious stock trading in August 2001 was already underway, Myburgh denied just a day before that there were any problems at Saambou or that the bank would be placed under curatorship.

Top management at Saambou would have embarked on an intensive marketing campaign the next week to inform investors of "the real facts".

On February 9, the media was informed that Saambou would be placed under curatorship. A critically important meeting of the board of directors took place the next day.

Although Myburgh and Edwards did not attend this meeting, other members of the board asked pointed questions about, what they called, the planned asset stripping of Saambou.

The board warned that Investec planned to sell Saambou, as it wasn't a core investment. Several other financial institutions then started to express an interest in Saambou's mortgage and loans books as well as its micro-lending interests.

They also warned that it would have a negative impact on Saambou if it was placed under curatorship, as it would enable other institutions to pick up divisions of Saambou for a song.

The other board members also did not agree that some members of top management should be replaced.

Christo Wiese, registrar of banks, apparently addressed the board and indicated that the national treasury demanded radical changes to Saambou's top management before it would consider an intervention process.

However, spokespersons of the treasury indicated that attempts to bring about these changes were not sufficient.

Communication between Reserve Bank officials and those at the treasury was apparently not always effective.

It seems as if Gill Marcus, deputy governor of the Reserve Bank, was apparently frustrated that she could not regularly meet with treasury officials to discuss the issue.