Standard and Nedbank’s double standards exposed
NEDBANK and Standard Bank have demonstrated their double standards by unbanking companies they claim posed a reputational risk to their operations, despite the Zondo State Capture Commission report linking the two banks themselves to acts of corruption.
The banks’ reputations took a major blow when Justice Raymond Zondo, in his report, fingered them as wrongdoers. The banks also received extensive negative media coverage for their relationship with Gupta-linked Regiments Capital.
Approached for comment, Nedbank corporate communications head Annaleigh Vallie said: “Based on our initial review of the two Zondo reports, no adverse findings have been made against Nedbank. Nedbank will co-operate with any investigation undertaken as a result of recommendations in the Zondo commission report.”
When pressed about Nedbank’s double standards, Vallie said: “We have no further comment.” Standard Bank’s Ross Linstrom, also did not respond to the question of its hypocrisy, except to say it to co-operated with all competent authorities in respect of the commission’s work.
According to the Zondo report, the banks were associated with corruption linked to Regiments Capital and former Airports Company South Africa treasurer Phetolo Ramosebudi, who between 2010 and 2013 issued invoices in the names of entities controlled by him or his brother to Regiments Capital.
These amounted to more than R9.1 million. Judge Zondo also linked the banks’ questionable behaviour to SAA and Transnet, which were among the reasons the commission was established. Nedbank and Standard Bank have been directly linked to corruption activities, yet saw fit to unbank companies such as Sekunjalo Investment Holdings (Sekunjalo).
Trying to justify their decision, the banks claimed Sekunjalo and its related entities posed a reputational risk due to negative publicity. The banks’ action threatens hundreds of jobs and the future of thousands of employees’ dependents.
In documents at the Equality Court, Sekunjalo and its related group of companies expressed concern about the banks’ internal risk assessment procedures, relying as they did on vitriolic and inaccurate media reports by competitors in the media space.
The commission found that Nedbank was entangled in a conflict of interest and secret deals during its bidding for transaction advisory services at SAA.
It also found that more than R35 million was invoiced by Regiments Capital to Nedbank for various interest swop deals between Nedbank Capital and Acsa, and then Nedbank recovered the money from Acsa over the life of the interest swop transaction.
The report highlighted that Nedbank’s arrangement with Regiments Capital was an act contrary to its principal’s interests, “by increasing the margin payable by Acsa to Nedbank and thus increasing its 50% share of this margin.”
It was found that Nedbank representatives Mario Visnenza and Moss Brickman were among those who should be investigated for allegedly contravening the Prevention and Combating of Corrupt Activities Act 12 of 2004.
According to the report, those found to have violated the act might be guilty of dishonesty, unauthorised actions, biasness as well as the abuse of a position of authority.
The report stated that the matter requires further investigation by the authorities, as the commission hearings ran out of time before listening to Nedbank’s version.
Judge Zondo also found that more than R22 million was invoiced by Regiments Capital to Standard Bank in relation to a R1.75 billion interest swop between Standard Bank and Acsa, and then recovered by Standard Bank from Acsa, over the life of the interest swop transaction.
Financial investigations consultant Emarand van Zyl, who has been investigating and raising concerns about banks’ misconduct, said if the government failed to act against the banks, no one would.
“The government is protecting the banks. Where is consumer protection in South Africa? It has collapsed. The government must step in, the banking ombudsman must step in, but they are all sitting there doing nothing,” he said.