Absa saga should be re­viewed

The Star Early Edition - - LETTERS - Mor­gan Phaahla

A LOT of things have been said at vari­ance, con­fus­ing or­di­nary peo­ple not to fol­low the dis­course on why Absa is li­able for the loss sus­tained by the Re­serve Bank as a con­se­quence of the flawed as­sis­tance to Bankorp.

The pub­lic pro­tec­tor was not cer­tain about the en­force­abil­ity of the re­me­dial ac­tion on the Re­serve Bank. The about-turn seems to sug­gest that the pro­tec­tor fell short of find­ing the Re­serve Bank’s pri­vate share­hold­ers and Absa com­plicit in the wrong­do­ing.

What re­mains prob­lem­atic, though, is the “con­tin­u­ing se­crecy with which the as­sis­tance was cov­ered” and the con­tin­u­a­tion of as­sis­tance to Absa, in­clud­ing its lack of care to avert the de­fault by Bankorp be­fore the ac­qui­si­tion, and dis­clos­ing it in the pub­lic in­ter­est af­ter the ac­qui­si­tion.

It is rea­son­able to as­sume that Absa over­looked the sig­nif­i­cance of the bailout in terms of the in­ter­est charged on the loan.

If this is any­thing to go by, Absa is tech­ni­cally li­able.

It thus fol­lows that a re­view of the re­port by Judge Den­nis Davies’s panel of ex­perts would be legally prac­ti­ca­ble, in­clud­ing analysing the investment pol­icy con­cep­tu­alised by San­lam.

The tide may pos­si­bly turn against San­lam and prove that the de­mu­tu­al­i­sa­tion scheme was con­trived out of in­sider trad­ing to ben­e­fit pol­i­cy­hold­ers us­ing the ill-got­ten gains of Bankorp. Madame pub­lic pro­tec­tor, put a re­view to the test! Ekurhuleni

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