13/01/2017 10:55 SAST | Updated 16/01/2017 20:13 SAST

The Leaked Preliminary Public Protector Report Is Regrettable -- Absa

"Mkhwebane has provisionally found that the government breached the constitution and the Public Finance Management Act."

Mike Hutchings / Reuters

Absa in a statement on Friday called a preliminary report by Public Protector Busisiwe Mkhwebane that recommends the bank pay back R2,25 billion it received as part of an unlawful apartheid-era bailout "regrettable".

The Mail & Guardian reported on the leaked preliminary report on Friday, explaining that the Sarb, Treasury and the presidency were fingered in the report.

The provisional report from the Public Protector's office differs significantly from previous reports on the issue, notably the Davis Panel report, and the bank has relied on this in its defence.

The Davis panel of experts appointed by former South African Reserve Bank (Sarb) governor Tito Mboweni in 2000 found that Absa's shareholders did not derive any undue benefit from the Sarb's intervention, the bank said, and therefore no claim of restitution could be pursued against Absa.

"It must be noted that the matters and events under investigation occurred during the period 1985 to 1995, 21 to 31 years ago," the bank continued in its statement.

"The testimony provided by current Absa senior executives to the public protector was based on records available to the bank's current management, as none of them have personal knowledge of events at the time."

"Mkhwebane has provisionally found that the government breached the constitution and the Public Finance Management Act," the paper reported.

"However, Mkhwebane told the M&G that the report was preliminary and that she was awaiting feedback from the implicated parties –- 'information which might change the final report drastically'," M&G added.

Absa said because of that, it was "regrettable that the public protector's report has been leaked before further submissions and finalisation, because in its current form it perpetuates an incorrect view that Absa Bank was the beneficiary of undue SA Reserve Bank assistance".

Absa added that the public protector was invited to inspect confidential documents in its possession relating to the finalisation of the probe.

"These documents pertain to, among others, due diligence performed by Absa prior to acquiring Bankorp.

"Bankorp started receiving SA Reserve Bank assistance in 1985," it said. "Absa acquired Bankorp in April 1992 at fair value. All the obligations pertaining to the SA Reserve Bank's assistance were discharged in full by October 1995.

"We have written to the public protector informing her that we accept her invitation to make further submissions in terms of the Public Protector Act," the bank said.

"These submissions will correct several factual and legal inaccuracies that are contained in the provisional report. This will be done on or before the deadline of February 28 2017."

Bankorp saga has been an ongoing thorn in Absa's side. In June 15 2000, the Sarb governor appointed the Davis Panel to investigate the matter.

Explaining the background, the panel said: "From 1985 to 1992 the South African Reserve Bank provided assistance to Bankorp and, for the period 1992 to 1995, to its new owner, Absa. After the existence of that assistance belatedly became public knowledge, its nature and validity became the subject of controversy which was not resolved," Fin24 reported on Friday.