OWN CORRESPONDENT, Johannesburg | Sunday 6.00pm.
THE Reserve Bank has reopened investigations into the controversial R1.5-billion ($220-million) lifeline the bank threw the Bankorp banking group during the last years of apartheid.
The Reserve Bank has set up a panel, to be headed by Judge Dennis Davis, to probe its own role in the biggest bank bailout in South African history, the Sunday Times reported.
The Reserve Bank secretly made the money available, at an annual interest rate of one percent, from June 1990 to prevent Bankorp from folding.
Bankorp was at the time owned by Sanlam, which had close links to the apartheid government. It was bought in April 1992 by Absa and the loan was terminated in 1995, but the money was never recovered.
Reserve Bank Governor Tito Mboweni said the panel would probe whether the bank had contravened any law in making the loan.
It would also consider whether the Reserve Bank had followed the proper internal procedures and had acted in accordance with internationally-accepted principles of good practice.
Mboweni said the panel would table a report by the end of August.
The government’s anti-corruption watchdog body, the Heath Special Investigations Unit, last year found that the Reserve Bank had not followed guidelines for giving assistance to commercial banks.
The Heath Unit however dropped a claim against Absa and Sanlam for repayment of the loan saying it would put too much pressure on the banking institutions and this would be contrary to public interest. — AFP