Public Protector Busisiwe Mkhwebane says she also wants the constitutional mandate given to the Reserve Bank around protecting the value of the currency to change.
JOHANNESBURG – The man who lodged the original complaint about Absa and the Reserve Bank with the Public Protector says he can’t see how her finding that the bank must change its monetary policy mandate could ever be implemented.
On Monday, Public Protector Advocate Busisiwe Mkhwebane found Absa must repay over R1 billion the bank gave as a bail-out to Bankorp before it became part of Absa.
The bank bailed out Bankorp in the 1980s and 1990s.
But Mkhwebane says she also wants the constitutional mandate given to the Reserve Bank around protecting the value of the currency to change.
Advocate Paul Hoffman says he didn’t ask the Public Protector to investigate the mandate of the Reserve Bank.
“She’s on a frolic of her own, it has nothing to do with the complaint. I’m sure that the Reserve Bank will successfully knock that particular finding on its head.”
While Wits University economic lecturer Lumkile Mondi says he doesn’t believe this will be implemented.
“And our lawmakers in Parliament will act responsibly in ensuring that the policy makers do what they are supposed to do, rather than loot state resources to pursue individual and self-interest at the expense of the majority of South Africans, whom are black.”
Absa has already said it disputes the findings of this report.
While Absa bank says it is still waiting to study the Public Protector’s full report, it doesn’t believe it owes the central bank any money.
It says the Reserve Bank helped Bankorp from 1985 until 1992 when Absa bought it while the assistance agreement remained in place until 1995 with Absa as the new beneficiary.
The bank says the customer debt write-offs that resulted from the Reserve Bank’s intervention were taken into account in determining the price Absa should pay for Bankorp. The price was R1.23 billion and was paid directly to Bankorp shareholders which is why Absa should not be expected to pay again.
Absa insists that the money did not go to Absa shareholders, it instead was used to write off the debts of Bankorp customers.
The bank says after reading the Public Protector’s full report it will consider its options which may include a judicial review.
Article published in Eyewitness News (EWN) 20 June 2017