Judgment in Absa-Bankorp case to be handed down early in 2018
The case relates to an Apartheid-era bailout of Bankorp, where the Reserve Bank effectively extended R1.1bn to the bank in the form of a structured transaction
Judgment was reserved on Thursday in the Absa-Bankorp case, which has pitted public protector, Busisiwe Mkhwebane against the Reserve Bank, the minister of finance and Absa — all of which are seeking to have her report into this matter, or findings in the report, set aside.
Judge Cynthia Pretorius, one of three judges hearing the matter, said that judgment would be handed down in late January or early February.
The case relates to an Apartheid-era bailout of Bankorp in which the Reserve Bank effectively extended R1.1bn to the ailing bank in the form of a structured transaction. Absa’s acquisition of Bankorp was effective in April 1992, making it the recipient of the Bank’s assistance.
In a report published in June — the outcome of an investigation following a complaint laid with the public protector’s office in 2010 relating to the matter — Mkhwebane directed the Special Investigating Unit to reopen an earlier investigation by the unit into the lifeboat, “in order to recover misappropriate public funds unlawfully given to Absa Bank in the amount of R1.125bn”.
That investigation, carried out in 1999 by then head of the SIU Judge Willem Heath found that any attempted recovery would cause systemic risk to the banking system, which would harm the public at a large.
A second investigation in 2000 by a panel headed by Judge Dennis Davis found that the amount paid by Absa for Bankorp took into account the Bank’s lifeboat, and therefore Absa had not benefited.
Absa has applied to have Mkhwebane’s remedial action set aside, while Finance Minister Malusi Gigaba is seeking to have the entire report set aside on the basis that Mkhwebane ignored the facts that were before her and reached conclusions “manifestly lacking in logic”.
The Bank has gone a step further and is seeking a declaratory order that Mkhwebane abused her office by, for example, holding secret meetings with the Presidency that were not disclosed in her final report. The Bank is also seeking a costs order against her in personal capacity on the basis that she lied under oath in court papers about the nature of those meetings.