signed on the basis of verbal information given in good faith by a Vodacom consultant, will no doubt be overridden by the previously undisclosed terms and conditions should a dispute arise.
This is surely an industry requiring close examination by the regulatory authorities. Tribunal, together with the proposed R300m f ine, was the material fact that necessitated African Bank to withdraw the issue of a US$ bond, early in February this year. Prior to that fact, the relevant fraud was an internal matter that was not material in terms of size or significance. A casual reader of the article may potentially and thus inaccurately understand that the bank had “material” information for some time, keeping it under wraps from their stakeholders, which is untrue.
The bond that had to be withdrawn was for $300m, not $3bn as cited in the article. Total bids received were $3.6bn, thus it was 12 times over-subscribed.
Our liability management policies are extremely conservative, in view of the fact that our chosen business model implies that we assume “significant credit risk ” in the front end of the business. This is materially different to taking on “too much risk in the business” as stated in the article.
The credit risk that we take is carefully considered and priced into our business and balanced against our funding models. Executive: Funding and Liability