Capitec faces many questions despite big profits
shares by its top executives.
On the issue of its business model, Capitec contends that it is providing an important segment of the market with the opportunity to buy homes; an opportunity that segment does not have because of apartheid laws.
As for criticisms that its BEE shareholder has very close ties with the ANC, Capitec replies that it didn’t do anything that was not above board and that the deal was very good for black economic empowerment and for Capitec.
As for chief executive Riaan Stassen’s sale of R88 million worth of shares in the past year, including just weeks ahead of the announcement of a discounted rights issue, Capitec notes that Stassen still holds R400 million worth of shares.
Amid the disturbing amounts of controversy is one key fact: right now unsecured lending is a hugely profitable banking activity for some. page 17
Smit Amandla
There appeared to be more questions than answers forthcoming from the extraordinary media briefing by the Department of Agriculture, Forestry and Fisheries at Parliament yesterday.
Symbolically, the televised linkup with the Government Communication and Information Service in Pretoria focused on empty chairs, there was not a single journalist present.
As part of this very fickle environment, Capitec is probably not too surprised about the current spate of bad publicity to which it is being subjected.
Down in Cape Town, there was a sea of journalists wanting to find out why the department was dead set on investigating ancient contracts of Smit Amandla Marine, which lost the tender to manage the patrol and research ships of the department in March. It had, apparently, held the contract for 17 years. It was then given to Sekunjalo, which became preferred bidder, but because of irregularities in the granting of the tender, acknowledged by the department, Sekunjalo was dropped.
The task of marine patrolling then fell to the navy.
In May Agriculture, Forestry and Fisheries Minister Tina Joemat-Pettersson said that Smit Amandla had fronted and had undermined the rule of law.
On Monday, acting director-general Sipho Ntombela suggested that there was collusion between his department’s officials and Smit Amandla to ensure the contract was renewed and renewed and renewed, without the proper paper work.
It suggests, at least between the lines, that Smit Amandla did these officials a few favours. Ntombela suggested that Smit Amandla had benefited to the tune of R1.6 billion up to R2bn.
One perplexing matter was why in the middle of all this Smit Amandla now is again managing one of the marine patrol ships, which now fall under the control of the Department of Environmental Affairs.
It sailed out of harbour at Simon’s Town last week and is now in East London.
Ntombela, pressed on why this had been allowed if Smit Amandla was corrupt, said that an explanation could be that the SAS Algoa had originally been part of the Environmental Affairs Department. “They will have to account for it.” page 17 The latest FNB estate agent survey and house price index provide little evidence of any improvement in the health of the residential property market.
The survey revealed there had been a mild improvement in the average time a property remained on the market before being sold to an estimated 15 weeks and six days in the third quarter from 17 weeks and four days in the previous quarter.
However, FNB property leader sales strategist Clinton Martle stressed that 15 weeks and six days still meant a property remained on the market for an average of almost four months before it was sold: too long to represent a healthy market.
“One would not yet expect to see much price growth in real terms at this length of average time on the market,” he said.
Martle said the residential market still appeared to be unrealistically priced.
This was supported by the survey, which indicated that the percentage of sellers who were required to drop their asking price to make a sale improved to 84 percent from 87 percent, but still remains extremely high and the average price reduction remained unchanged at minus 10 percent.
FNB’s house price index revealed that year-on-year house price growth slowed further to 5 percent last month from 5.3 percent in August and the bank believes year-on-year house price growth will be lower this year at between 3 percent and 5 percent.
After taking the effects of inflation into account, this means another year of negative real house price growth and that a strong recovery in the market is still a long way off, particularly as the household debt to disposable income ratio increased to 76.3 percent in the second quarter after some quarterly improvement from the 80 percent plus level peak.