Thursday, June 22, 2017

Statement on the Public Protector`s Remedial Action Concerning Public Funds Unlawfully Given to ABSA
19 June 2017

The SACP has noted the Public Protector`s report released today recommending that the state must take legal action to recover public funds unlawfully given to ABSA in the amount of R1.125-billion. This remedial action, notwithstanding legal provisions for a review, falls within the scope of, and concurs with the way forward long articulated by the SACP through its financial sector transformation campaign. The Party initiated the campaign and has been driving it for over 17 years. Below we provide access to at least two statements released by the SACP during the course of the campaign. The SACP reaffirms these statements:

Statement on the Heath Report on the ABSA Bailout

The SACP has learnt with dismay and complete disbelief of the decision of the Heath Investigation Unit not to take legal steps against ABSA. This is despite the fact that the Heath Unit had come to the conclusion that the bailout from the Reserve Bank was both irregular and possibly illegal. We find this whole episode morally outrageous as it threatens to undermine all good efforts at exposing and fighting corruption.

This is a blatant example of the extent to which our country remains hostage to the interests of big finance capital. Even more serious, this illustrates the degree to which our society is still characterised by two kinds of morality - one set of standards for the rich, another for the poor. This is all the more repugnant given the fact that millions of Rand of state money was being used to bankroll a sector that still remains inaccessible to the majority of people of South Africa. One cannot help but be reminded of the words of one famous poet, to the effect that "if a sea robber is small he is called a pirate, if he`s big he is called an Admiral".

The SACP calls for a full exposure of, and explanation from, both ABSA and those in the Reserve Bank who were responsible for this travesty. The people of this country, who must be the final arbiters and judges, are entitled to know the full facts and circumstances surrounding this entire arrangement... We cannot place the fate of South Africans solely in the hands of the financial markets.

Issued by the SACP Department of Information & Publicity
Dr. Blade Nzimande SACP General Secretary
2 November 1999

Bankorp-ABSA Life-boat Saga: Murky Past Must Energetically be Pursued and Investigated - SACP
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... 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.

18 January 2017



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