Absa challenges finding – says there’s no reason to pay back any money
ABSA Bank has filed its court papers to review public protector Busisiwe Mkhwebane’s recommendation that it pay back the money that the SA Reserve Bank gave to bail out its predecessor‚ Bankorp.
Additionally‚ it is asking the court to force Mkhwebane to show all the documents she had used to make her decision against Absa, after she refused to do so.
The bank suggested it might make these public, due to the overwhelming interest in the matter.
On its court action, Absa said: “We look forward to this case being brought to court.
“The years of baseless accusations have been unfair and prejudicial to Absa.
“Because the business of the courts is conducted in the open‚ South Africans will get an opportunity to hear the facts – and watch them being interrogated – for this matter to be put to rest.”
Absa said it was challenging the public protector’s report on several grounds‚ namely:
ý There is no debt owed by Absa;
ý The process was procedurally flawed;
ý The three-year period to recover the socalled debt has prescribed, as it is 21 years after the loan to Absa’s predecessor.
It is also arguing that Mkhwebane does not have jurisdiction to investigate the matter, because her office was not in existence when the loan was given by the government to its apartheid predecessor.
Bankorp received a bailout from the SA Reserve Bank in 1995, to pay back debts of its bankrupt clients and keep the bank from collapse and the banking system stable.
Mkhwebane had conceded that it was a lifeboat to a bank that kept it and the financial system from collapsing, Absa said.
Mkhwebane has said Absa, which later bought Bankorp, had benefited from the government loan and must return it with interest.
But her findings are in contrast with the Davis Panel and Judge Heath statutory investigations into the matter.
She relied on a report, called the Ciex, written without asking Absa for input.
“In its ‘investigation’‚ Ciex never gave Absa an opportunity to make representations, disregarding the bank’s right to a fair hearing,” Absa said.
It also said it did not benefit from the loan, because it paid R1.23-billion to buy Bankorp – its value at the time.
“The public protector appears to have ignored facts and disregarded evidence provided to her,” the bank said.
“It says the Ciex probe gave no reasoning for its conclusion that Absa was liable for R3.2-billion – it was merely advice that the government should coerce Absa into paying.”
It also quoted Mkhwebane’s own report, in which she admitted that she did not have jurisdiction on the matter, as the law establishing her office and powers did not exist at the time of the loan.
Absa said her recommendation was unlawful – and insisted that the Special Investigating Unit (SIU) ask the president to reopen an investigation into the matter, despite two previous ones.
It said the public protector had exceeded her own powers and usurped the powers of the SIU and the president.
The Reserve Bank, parliament and the finance minister, in their legal challenges to the same report, also argued she had overstepped her mark when recommending that parliament change the constitution.