NEWS

Absa, Like The Reserve Bank, Is Going To Court To Get The Public Protector's Report Set Aside

Busisiwe Mkhwebane wants Absa to repay R1,125bn, a move the bank refutes as it believes it has paid all money owed.

21/06/2017 07:59 SAST | Updated 21/06/2017 10:09 SAST

Absa will approach the high court to get the public protector's report into an apartheid-era loan it received set aside.

The South African National Reserve Bank also said on Tuesday it would do the same.

Public Protector Busisiwe Mkhwebane's report recommended that Parliament considered amending the constitutional clause that seeks to protect the rand.

Parliament said on Tuesday it has received and is considering the report.

Mkhwebane on Monday announced findings of her office's investigation into the Sarb assistance to Bankorp between 1985 and 1995, which Absa bought in 1992.

She wants Absa to repay R1,125bn, a move the bank refutes as it believes it has paid all money owed.

She also recommended Parliament consider a change in currency laws by taking out the Constitution and Sarb's mandate to protect the currency from inflation.

In a very brief statement, Parliament spokesperson Molotho Mothapo on Tuesday said the institution had received the report on alleged failure to recover misappropriated funds.

"The report, amongst others, directs the chairperson of the National Assembly's portfolio committee on justice and correctional services to initiate a process that will result in the amendment of section 224 of the Constitution, in pursuit of improving socio-economic conditions of the citizens of the Republic.

"Parliament will consider the report through its usual internal processes and determine an appropriate course of action."

Warning

Former South African Reserve Bank governor Tito Mboweni meanwhile, warned Mkhwebane on Tuesday not to interfere in the independence of the bank.

One of the central tasks of Sarb "is to protect the stability of the banking and financial system of the economies in which they operate", Mboweni posted on his Facebook profile on Tuesday.

He said that to fulfil this mandate, central banks have to assess the negative impact of bank failures.

"This is a huge responsibility which must be approached with extreme care," he said. "Political considerations have to be considered, yes, but they must not be above all else."

The Sarb announced on Tuesday that it is obtaining an urgent legal review of what it believes is unlawful action by Mkhwebane while the Democratic Alliance will also seek a meeting with Parliament's legal adviser to confirm the call was unlawful.

"Clearly, her recommendation goes beyond what she is legally empowered to do and is indicative of her long-term plan to render the Public Protector's office ineffective," DA legal commission chairperson Glynnis Breytenbach said.

The effect of the "remedial action" appeared "sinister and a cause for great concern", and the party would be watching the developments, she added. -- additional reporting by News24