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Finweek English Edition - - FEEDBACK - Dave Mor­combe Gavin Jones

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

Man­age­ment, Trea­sury

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