In 1999 the Special Investigating Unit (“the SIU”), following a proclamation by President Thabo Mbeki, found that the South African Reserve Bank R1.5 billion bailout of the Bankorp Group and Absa Bank was a “simulated transaction” – a gift disguised as a loan. That Report was never released by President Mbeki or any other President after him.
Instead, Judge Willem Heath who led the probe released a 17-page Official Media Statement on his findings.
Soon after, Mr Tito Mboweni – then governor of the Reserve Bank and now Minister of Finance – appointed a Panel of Experts, led by Judge Dennis Davis, to undertake the same investigation that Judge Willem Heath’s Special Investigating Unit had just completed. The Panel of Experts reached the same conclusion as the SIU as regards the “simulated” nature of the bailout.
Then came the Public Protector who investigated the same issue, made findings and took remedial action.
While both the SIU and Davis Panel of Experts found that the transaction was, in effect, a fraud, they stopped short of recommending the repayment of the funds thus procured. So, their findings were not challenged in court. The Public Protector, however, ordered the repayment of these funds. What happened to her next leaves some unanswered questions about why the bailout issue seems to be a no-go area.
In this short paper, I explore this question, beginning with the background to this infamous bailout. In that process, I discuss the findings of these probes, offer my own views and suggest the way forward.
Read the full Analysis here The Unfinished Story – The SA Reserve Bank Bailout of the Bankorp Group and Absa Bank – Part 1
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Interesting read. Thanks for sharing. Just a question, what was the purpose of sharing this info and what do you, as a jurist, intend on doing with it from a legal point of view?
Hi Lindie. You will have noted that this is Part 1 of a 2-part paper. You will also have seen in my summary of what will be covered in Part 2 that the purpose “from a legal point of view” is to analyse the findings and recommendations of the 3 probes of the bailout, and then give my own view on each of them. In the end, I shall venture a view on what needs to happen – “from a legal point of view”. Do read Part 2 when it comes out. Many thanks for your interest.
Hi Lindie. I trust Part 2, which was published earlier today, answers your question somewhat.
Looking forward to your findings and recommendations
Part 2 was published earlier today
SC what can we do to push or open a case against a bank 1st before we go for Reserve Bank, we need to keep pushing them to courts until they start paying or dragging their names, we can’t be just sitting and doing nothing while they move billions out o the country and bring it back as investment or as investors
If you have evidence of that, even if not solid evidence, send it to me and I’ll consider it.