BANKORP/ABSA LOAN
Stals: lifeboat saved banking system
Chris Stals’s 1996 submission provides significant insight into the criteria applied to Bankorp/Absa rescue
The Reserve Bank lifeboat to Bankorp/Absa, which is under renewed scrutiny following a report by the public protector, is outlined in great detail in former governor Chris Stals’s submission to the inquiry into the affairs of Tollgate in 1996. Tollgate, which owed Absa more than R200m, collapsed in 1992 amid allegations of dishonesty and mismanagement, leading to a five-year-long inquiry. The document is a fascinating insight into how the Bank behaved in the dying days of apartheid and the criteria it applied to bank assistance. Two investigations — one by Judge Dennis Davis and another by Judge Willem Heath — reported in 2001 that the form of the Bank’s assistance was illicit and had essentially provided Bankorp and Absa with free money. However, unlike the public protector’s report, which says Absa must pay back the money, the judges argued that this was not practical. Stals’s account of the lifeboat is quite different. Nothing untoward happened, he writes, and given the circumsta...
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