BANK GUNS FOR BUSI
Remedial action rested on material errors – Ramos
PUBLIC Protector Busi Mkhwebane, still nursing a bloody nose following a tussle with the central bank, faces another backlash, this time from Absa.
The banking giant has filed papers to challenge her report implicating it in a dodgy apartheidera financial bailout.
In papers filed yesterday, Absa approached the high court to set aside Mkhwebane’s “remedial action” that orders Absa to pay back R1.125 billion.
Absa chief executive Maria Ramos said the remedial action rested on material errors of fact and was imposed without procedural fairness, among others.
“The main relief is directed against the public protector’s remedial action requiring the SIU (Special Investigating Unit) to approach the president to reopen and amend Proclamation R47 of 1998 in order to recover from Absa funds which were allegedly misappropriated,” Ramos said.
The application was made days after Mkhwebane had made a U-turn not to oppose another application brought by the SA Reserve Bank to set aside and review her controversial decision to instruct the government to change the mandate of the central bank – which would have meant changing the constitution.
Mkhwebane instructed the SIU to recover the R1.125bn “lifeboat gift” from Absa. Mkhwebane was widely slated for her decision, although she was enthusiastically supported by the Black First Land First organisation and the ANC Youth League.
Ramos said that when Absa acquired Bankorp in 1992, it was on condition that it repaid the financial assistance it had received from the SARB, adding that the amount was paid in full, including the interest due to the central bank.
“Absa had no further obligation in relation to the financial assistance,” Ramos said in court papers.
She insisted that Absa acquired Bankorp for a fair value and was not liable for the latter’s debt to the SARB.
Ramos added that the SIU had in 1998 found no compelling reason to proceed with litigation to recover the money and that the panel of experts appointed by the then governor of the SARB deemed attempts to recover the money as unwarranted.
She also said the so-called CIEX Report, which Mkhwebane relied on in her investigation, did not provide for evidence or advance any legal basis for the recovery of the money.
“The real beneficiaries of the Bankorp assistance were Sanlam policy holders and pension fund beneficiaries,” she pointed out.
Ramos maintained that Mkhwebane’s remedial action rested upon material errors of fact as Mkhwebane failed to appreciate the consequences of the manner in which the transaction was structured and that Absa had paid for the “lifeboat” when it acquired Bankorp.
She said the remedial action was imposed without procedural fairness, as Absa, despite requests, had never been shown critical documents which formed the basis of the findings.
“Not even the complaint was made available to Absa,” she said.
Ramos added that debt allegedly due to the SARB by Absa occurred more than 20 years ago. “No basis for recovery of any debt, assuming it to be due, is set out in the final report,” she said.
“The public protector does not have jurisdiction to investigate matters which occurred before the coming into operation of the Public Protector Act or the establishment of the Office of the Public Protector,” Ramos added.
The Office of the Public Protector came into being in 1995 and the debt dated back to the mid-1980s.
Ramos also said the remedial action stripped the power of the SIU and President Jacob Zuma.
Her spokesperson, Cleopatra Mosana, would not comment last night.
PRESSURE MOUNTING: Absa is taking Public Protector advocate Busisiwe Mkhwebane to court.