Zuma move will show who insiders are
Banking executives can’t be sleeping well in this uncomfortable political environment. Regulators at the Reserve Bank can’t be happy either.
Banks don’t like the public spotlight. They skirt controversy under the guise of client confidentiality, seldom answer questions and they don’t get into public spats. But with the leaking of the public protector’s draft report, the narrative of a grand conspiracy to hold on to white monopoly capitalist wealth, involving banking executives, the Bank, the Treasury and the apartheid order, is gaining momentum.
Where is it all going? At first, the campaign looked harmless. Project Spiderweb — the so-called intelligence dossier that drew fabricated links between former and top Treasury officials including Trevor Manuel and Maria Ramos, and the old Afrikaner establishment, particularly Johann Rupert — emerged in August 2015 to much public ridicule.
But after the big four banks terminated their relationships with the Gupta family and associated companies, things began to get nasty.
The Project Spiderweb conspiracy re-emerged, this time in a presentation by then Oakbay CE Nazeem Howa that included fantastical diagrams of Rupert as a majority shareholder in all four big banks. Ramos and Manuel were dragged into the organogram too.
Finance Minister Pravin Gordhan and his director-general, Lungisa Fuzile, were among those who were prevailed upon to hear the Oakbay presentation as the Guptas lobbied for intervention in their banking problems. Last October, Gordhan launched a high court application for a declaratory order stating he may not intervene in the affairs of banks.
To his affidavit, he attached a certificate from the Financial Intelligence Centre listing 72 reported suspicious transactions by the Guptas and their companies. The idea was to flush out the Guptas’ suspicious activities and provide the opportunity for the banks to reveal the details of the transactions.
But the banks haven’t done that. While all four responded to the declaratory order supporting Gordhan, the most incriminating thing we have learned is that there was “evidence of large unexplained transfers of funds between the Oakbay companies and related parties and other banks”.
For bankers and law enforcement, this is a sign that something untoward is up. But it is hardly enough to persuade the public that the Guptas are involved in illegal activity and that the banks, therefore, had good reason to close their accounts.
This is particularly so when that public is aggrieved over the tight hold the banks and other large corporations have over an economy it believes should be more transformed.
The Bankorp/Absa lifeboat is a complex story not only about apartheid cronyism, but also the role of a central bank stepping in to prevent systemic failure. But, the two issues have been muddled together by the public protector report,
THE LIFEBOAT IS A COMPLEX STORY NOT ONLY ABOUT APARTHEID CRONYISM, BUT ALSO THE ROLE OF A CENTRAL BANK STEPPING IN
with the result that many people, including ANC leaders, believe Absa must pay back the money.
This is dangerous not only because it is wrong — Absa shareholders didn’t benefit from the Bank assistance — but also because the principle of central bank intervention through soft loans or simulated transactions is under fire too.
So, back in the present things are not looking great. Gordhan has been painted into a corner with the evil banks. President Jacob Zuma, meanwhile, will be relishing the new environment, which is shaping nicely for something he has wanted for some time: a commission of inquiry into the banks.