Apartheid-era finance minister calls Absa lifeboat a ‘dead horse’

Provisional findings made by the public protector that Absa should pay R2.2 billions in interest fees have been dismissed by the finance minister who presided over the deal close to 30 years ago.

Candid in his response to the matter about the Absa lifeboat that has resurfaced recently, Barend du Plessis believes everything was above aboard and that Absa does not owe the South African Reserve Bank a cent.

In the eighties, Du Plessis was the head of the Reserve Bank and Chris Stals, the governor, reported to him. The deal had to be approved and signed off by him, which was done in 1985 when R1.5 billion was released to Bankorp, a company that was later bought out by Absa.

Though the loan was repaid by 1995, the public protector has relied on the Ciex report, which indicates that billions in interest were outstanding and the deal was simply a way for the Apartheid government to assist companies in which they had heavy economic interests before democracy and was also the finalisation of the transition of power to the ANC.

ALSO READ: Lead investigator of public protector’s Absa report has quit 

Put simply, Bankorp was loaned money that was then paid back at an interest rate of 1% and then loaned back to the Reserve Bank at an interest rate of 16%.

Interestingly, Barend’s brother is AS du Plessis, who was a Sanlam board member when the lifeboat was processed. Sanlam was the main shareholder of Bankorp when the deal was completed and received 88% of the cash when Absa bought Bankorp out.

Speaking to HuffPost SA, Du Plessis said: “It is impossible to bring that dead horse back to life.” He confirmed he was consulted about the matter.

READ MORE: I entered into no such agreement with Absa – Stals

Anton Gildenhuys, chief actuary and group risk officer, said Sanlam had noted the implications of the public protector’s report.

“Given that the matter is being handled by the public protector’s office, we do not believe it is appropriate for us to comment on the issue at this stage. We will cooperate fully with the public protector to the extent that will be required.”

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