APARTHEID DEBT
Failure to process CIEX report ‘a violation’ of the Constitution
An investigation headed by Judge Dennis Davis found Absa could not be regarded as a beneficiary of the Reserve Bank ’lifeboat’
Absa’s "apartheid debt" is hardly a new story to the media or the authorities, which have probed the matter in at least three separate investigations since 1985. At the time, the South African Reserve Bank, concerned that apartheid-era economic sanctions would negatively affect the country’s banks, elected to provide financial assistance to them. Bankorp was one of the banks that received financial assistance. According to an investigation headed by Judge Dennis Davis in 2000 and commissioned by then Reserve Bank governor Tito Mboweni, the package benefited Bankorp to the tune of R1.1bn. This was paid out in R225m instalments between 1991 and 1995. In terms of the agreement, low-interest loans were provided by the Reserve Bank to Bankorp. The bank, in turn, reinvested this money in the Reserve Bank in a combination of cash and bond investments at higher-yielding rates, earning Bankorp a handsome net interest margin. Also in 1991, Sankorp, a subsidiary of Sanlam, Bankorp’s major shar...
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