Business 19.6.2017 02:10 pm

Absa says it won’t pay back the money

An Absa Bank building in the Johannesburg CBD. Picture: Alaister Russell

An Absa Bank building in the Johannesburg CBD. Picture: Alaister Russell

The bank believes is has already met its obligations and is considering a high court review.

In a statement following a press conference by Public Protector Busisiwe Mkhwebane, Absa claims it is under no obligation to pay R1.125 billion to the government, which Mkhwebane has deemed an improper bailout.

Mkhwebane has found that the SA Reserve Bank (Sarb) bailout of of Bankorp was unlawfully made and Absa must pay it back.

Sarb gave assistance to Bankorp between 1985 and 1995 and Absa acquired Bankorp in April 1992.

The statement said: “We have not yet received a copy of the report and we are urgently requesting the Public Protector’s Office to send it to us. Once we have read it we will consider our legal options including seeking a high court review.”

The bank said it had met “all its obligations in respect of the loan provided by the SA Reserve Bank by October 1995. It is our firm position that there is no obligation to pay anything to the SA government.”

Addressing the media in Pretoria on Monday morning, Mkhwebane said Absa bank and its predecessor Bankorp unduly benefited from an SA Reserve Bank (Sarb) bailout to the value of R1.125 billion and recommended the Special Investigating Unit should recover the funds.

“The allegation whether the South African government and the Reserve Bank improperly failed to recover from Bankorp Limited/ABSA Bank an amount of R3.2 billion cited on the CIEX report, owed as a result of an illegal gift given to Bankorp Limited/ABSA Bank between 1986 and 1995 is substantiated,” Mkhwebane told a media briefing in Pretoria.

“The correct amount of the illegal gift granted to Bankorp Limited/ABSA Bank is in the amount of R1.125 billion.”

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