PRETORIA, The South African government is allowed to recover 1.125 billion Rand (about 86.52 million US dollars) in misappropriated public funds from Absa Bank and its predecessor Bankorp, according to a proclamation by Public Protector (Ombudsman) Busisiwe Mkhwebane, who released a report here Monday into misappropriate use of public funds before the end of apartheid rule.
The Public Protector investigated the matter after the complainant, Pual Hoffmann, alleged that the government and the South African Reserve Bank failed to implement the recommendations by Britain-based asset recovery agency, Ciex, and to recover the money from Bankorp Limited, which eventually became a part of Absa, without providing reasons to that effect.
The Ciex report alleged that 24 billion Rand were unlawfully given to Bankorp from 1985 to 1992 by the Reserve Bank (as a lifeboat/gift). It then provided Absa with a further 2.25 billion Rand in bailouts from 1992 to 1995.
Briefing the media here, Mkhwebane said the two investigations into the matter established that the financial aid given to Bankorp/Absa was irregular, but the correct amount attributable was 1.125 billion Rand.
Mkhwebane said Ciex was paid 600,000 British pounds for services which were never used by government. No evidence could be found that any action was specifically taken in pursuit of the Ciex report.
The amount given to Bankrop/Absa Bank belonged to the people of South Africa. Failure to recover the ‘gift’ resulted in prejudice to the people of South Africa as the funds could have benefited the broader society instead of a handful of shareholders of Bankrop/ABSA Bank.
The Public Protector’s report found that the failure by the government and the central bank was inconsistent with the Constitution and constituted improper conduct and maladministration.
The South African Reserve Bank, in granting the financial aid, failed to comply with section 10 (1) (f) and (s) of the South African Reverse Bank Act No.90 of 1989. The Ministry of Finance had a duty as obliged by section 37 of the South African Reverse Bank Act of 1989 this failed to adhere to section 195 of the Constitution by failing to promote efficient and effective public administration.
Some of the remedial action recpmmended by Mkhwebane included having the government’s Special Investigation Unit (SIU) re-opening the case and recovering the funds which she said were given unlawfully to Absa. The Public Protector said the SARB must fully co-operate with the SIU and also assist it in recovering the funds.
Another recommendation is that the Parliamentary Committee on Justice must initiate a process which will result in the amendment of section 224 of the Constitution to emphasize that the SARB must promote a balanced and sustainable economic growth, while ensuring that the well-being of citizens are protected.
Source: NAM NEWS NETWORK