Bankorp-ABSA life-boat saga: Murky past must energetically be pursued and investigated – SACP
19 January 2017
The SACP calls on ABSA to pay back the full amount plus interests of the bailouts provided to Bankorp by the Reserve Bank from 1985 to 1992 and thereafter from 1992 to 1995 to ABSA after the bank acquired Bankorp in April 1992: If the contents of the leaked Public Protector’s report are valid. There can be no doubt that ABSA has benefited from the acquisition of Bankorp and further from the decade-long bailouts. The leaked Public Protector’s report recommends that ABSA must pay back an amount of R2.25-billion that it received as part of the unlawful apartheid-era (from 1985) bailout that continued during our transition to democracy in 1994-1995.
It is important to recall that the Davis Panel that was also involved in investigating the bailouts found that their form and structure were seriously flawed and illegal – although the Panel also found that it would be impractical to seek to recover money from ABSA on the grounds that the principal beneficiaries were SANLAM policy-holders and that ABSA paid a “fair price” for Bankorp.
The SACP is calling for a further investigation into the bailouts. It is crucial as part of the Financial Sector Transformation to go to the root by extending the investigation to cover the entire apartheid state looting. State and public resources must strictly be used for transformative developmental purposes as opposed to private corporate or individual interests!
The re-emergence into the public domain of the ABSA-Bankorp life-boat saga is a timely reminder of the massive abuse of public resources by the Reserve Bank, amongst others, in the last decade of apartheid and during the early transition period. Established, mainly Broederbond-linked, monopoly financial institutions were provided with scandalous support that at least two post-1994 commissions have found was highly irregular, secretive, illegal, and on a scale that was both prolonged and financially excessive. This support to monopoly finance capital by the Reserve Bank at the time was part of a broader pattern of sanctions-busting, illegal capital transfers, and fraud and corruption perpetrated by the apartheid regime, its agents and supporters. These actions continue to have a dire impact on our current South African political economy.
The SACP believes that this murky past has not been energetically pursued and investigated since 1994. The Truth and Reconciliation Commission, for instance, as the SACP noted critically at the time, devoted less than a week into hearings about the complicity of big business in apartheid. The SACP, therefore, supports access to information case in the courts against the Reserve Bank. Much more light must be shed, not just on the critical 1985-1994 period, but also on the role of the Reserve Bank after 1994 in facilitating massive capital flight out of our country.
ABSA, like the rest of established monopoly capital in South Africa has deep roots in gross human rights abuses. The prevailing excessive concentration of banking (four major institutions), the neglect of social investment, and the continued and frequent abuse of the poor through bank evictions are all symptoms of the impact of decades of White minority rule from which the likes of ABSA have benefited. Radical transformation is imperative across the financial sector in general.
Rather than diversions that may end up benefitting private interests that have been manoeuvring to cash in, the real issue with the Reserve Bank is its singular Constitutional mandate to “protect the value of the currency”. Even the U.S. Federal Reserve Bank has an employment preservation mandate in addition to its currency value responsibilities. Back in 1995 the SACP made this point to the Constitutional Assembly hearings. Unfortunately this was the hey-day of Chris Stals and of neo-liberal inflation-targeting dogma. While in recent years the Reserve Bank has applied its inflation targeting mandate with a degree of flexibility, it still remains locked into an inappropriate paradigm for the realities confronting our country.
While noting all of this, we also need to guard against being hijacked by other polluted influences in the current Bankorp life-boat matter. It is quite clear that the Guptas and their circle, including, no doubt, the UK-based fake-news PR company Bell Pottinger, have a vested interest in the unfolding story. Their motivation is obvious – having had their accounts belatedly blocked by all four major banks in South Africa because, it seems, of highly suspicious multi-billion rand currency flows – they now wish to seek revenge. They claim that in blocking Gupta-related accounts the banks were protecting “White monopoly capital” and were targeting “Black” emergent business. The SACP rejects the notion that apartheid-era crimes, and the problematic existence of apartheid era monopoly beneficiaries in the present, justifies parasitism and money-laundering by others.
We also note that those currently promoting the parasites’ narrative are relying considerably on a shallow CIEX report, written by an ex-British intelligence operator (Do they ever really retire?) who was looking for a massive “bounty hunter fee” for recovering monies for the new ANC government from fraudulent apartheid-era deals. Apart from the Bankorp-ABSA matter, which was already in the public domain at the time, the report has zero substantial evidence of any other such deals, although no doubt a great deal of corruption and money laundering had occurred. However, most of the CIEX report (Available on-line) is devoted to a proposal for restructuring South Africa’s intelligence services, basically by contracting out to private parties most of its operational work! It is reasonable to believe that the CIEX had itself in mind. The SACP finds it curious that those who shout loudest about “national sovereignty” and “foreign influences” are happy to be led by the nose by the likes of Bell Pottinger and CIEX.
Issued by Alex Mohubetswane Mashilo, National Spokesperson, SACP, 19 January 2017
