Government allowed to recover more than R1 billion from Absa

Public Protector Busisiwe Mkhwebane with President Jacob Zuma. Photo: GCIS
Public Protector Busisiwe Mkhwebane with President Jacob Zuma. Photo: GCIS

GOVERNMENT is allowed to recover R1.125-billion in misappropriated public funds from Absa Bank and its predecessor Bankorp.

This follows a proclamation by Public Protector Busisiwe Mkhwebane on Monday when she released a report into the misappropriate use of public funds pre-democracy.

The Public Protector investigated the matter after the complainant, Advocate Paul Hoffmann, alleged that government and the Reserve Bank failed to implement the recommendations by UK-based asset recovery agency, Ciex, and to recover the money from Bankorp Limited, which eventually becomes a part of Absa, without providing reasons to that effect.

The Ciex report alleged that R24 billion was unlawfully given out to Bankorp from 1985 to 1992 by the Reserve Bank (as a “lifeboat”/gift). It then provided Absa with a further R2.25 billion in bailouts from 1992 to 1995.

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Briefing the media in Pretoria on Monday, Mkhwebane said the two investigations into the matter established that the financial aid given to Bankorp/Absa was irregular, but the correct amount attributable was R1.125 billion.

Mkhwebane said Ciex was paid 600 000 British pounds for services which were never used by government. No evidence could be found that any action was specifically taken in pursuit of the Ciex report.

“The amount given to Bankorp/Absa Bank belonged to the people of South Africa. Failure to recover the ‘gift’ resulted in prejudice to the people of South Africa as the funds could have benefited the broader society instead of a handful of shareholders of Bankorp/ABSA Bank.”

Read Also: Con Court orders Zuma to ‘pay back the money’

The public protector report found that the failure by government and the Reserve Bank was inconsistent with the Constitution and it constitutes improper conduct and maladministration.

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