Absa deal now a political football

There is one issue that is beyond doubt in the heated debate raised by the leak of Public Protector Busisiwe Mkhwebane’s report on an apartheid-era bailout of Absa bank: this is a political football due for an extended kicking.

This is heightened by the timing of the leak in the wake of the bank closing the accounts held by the controversial Gupta family and companies they are associated with.

There is also the unassailable fact that former governor of the Reserve Bank, Tito Mboweni – certainly a man whose personal political history precludes from ever being fingered as an apartheid apologist – has already examined two financial “bailouts”, which go to the heart of the matter.

Mboweni launched an exhaustive inquiry into the deal back in 2002, followed by a report justifying the assistance the Reserve Bank had provided to Absa’s partner Bankorp, but with reservations about the “form and structure” of the “unprecedented” assistance provided and identifying Sanlam policy holders and pension fund members as the main beneficiaries of the deal.

Absa has decried the leaking of Mkhwebane’s report, which recommends the bank pay back R2.25 billion for what is labelled an unlawful apartheid-era bank bailout. The outstanding R2.25 billion pertains to the bank’s acquisition of Bankorp in 1992. Bankorp started receiving assistance from the Reserve Bank in 1985. Absa has indicated that all obligations to the Reserve Bank had been discharged in full by October 1995.

Two schools of thought have emerged: that the issue is being strongly driven by the ruling party to deflect from other areas of financial concern, and that pursuing the matter is likely to drastically affect the entire banking sector at a serious cost to the economy.

But whatever the rights or wrongs are, they deserve to be properly and transparently debated in a more dignified manner than in piecemeal reports.