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Absa Bank Must Pay Back R1.125 Billion For Corrupt Bailout

Busisiwe Mkhwebane

Ciex believed the entire value of the Sanlam shareholding it received for Bankorp should be claimed by government because Bankorp was kept afloat with taxpayers’ money

The Public Protector Busisiwe Mkhwebane has directed Absa bank to pay back R1.125 which Bankorp unduly benefited from. Mkhwebane also tasked the Special Investigating Unit to recover all the money from Absa.

Mkhwebane dropped the bombshell during media briefing in Pretoria yesterday. She recently accused for sitting on findings of the so called CIEX report which was delivered to President Thabo Mbeki during his tenure. The report was commissioned between 1997 and 1999.

The Ciex Report consists of 52 pages and was drawn up by Michael Oatley, a former British operative and founder of Ciex, a company based in the United Kingdom specialising in recoveries.

According to CIEX report Absa bank allegedly budgeted to pay back the lifeboat it received, and its executives “tried every trick in the book” to avoid repayment. Ciex helped the investigation by the Heath Special Investigating Unit, commissioned by government, which found the lifeboat was illegal and had to be repaid. Ciex disputed fears about threats to the banking system and the economy and reported Absa is ready and able to pay.

The report also found that Sanlam received shares in Absa which later acquired Bankorp. Ciex believed the entire value of the Sanlam shareholding it received for Bankorp should be claimed by government because Bankorp was kept afloat with taxpayers’ money. The amount was R3.8 billion in 1999.

Nedbank was also cited in Ciex report because it also received a lifeboat from the Reserve Bank in 1986. Nedbank had lent Lous Luyt R100 million but failed to recover it. The report found that by 1999 the interest of that had gone up to R500 million.

Trust Bank was another culprit in the report for exporting R300 million a year to the Cayman Islands and reinvested it from there. It profited $50 million and $130 million per year. It is not clear when will the Public Protector go after these.

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