The Cabinet has welcomed the progress made in finalising the deal between Britain’s Barclays and South Africa’s Absa.
The deal is the biggest such foreign direct investment transaction since 1994, Government Communications and Information Service head Joel Netshitenzhe said at a media briefing on Thursday, after Cabinet’s fortnightly meeting the day before.
The deal reflects the confidence of the international financial sector and investor community in general in South Africa’s future.
”While noting that a number of processes are still under way, the government is convinced that, once concluded, this transaction will result in Barclays Bank joining the financial sector in our country as a partner in our reconstruction and development efforts,” Netshitenzhe said.
However, activist group Jubilee South Africa on Thursday urged the government to withdraw its approval of Barclays’ bid to buy a 60% stake in Absa, as the British bank supported the apartheid government.
”This deal is not good for South Africa,” said Tristen Taylor, Jubilee South Africa’s apartheid debt and reparations coordinator.
”South Africa does not need vulture capital and the unapologetic return of a multinational corporation that put profit above human life and dignity.”
Jubilee South Africa is also consulting its lawyers to oppose the bid in a South African court, Taylor told reporters at a Johannesburg news conference.
On Monday, Barclays offered R33-billion or R82,50 a share plus a R2 final dividend to Absa’s shareholders for the stake.
Absa shareholders will vote on Barclay’s bid, and if approved it will be settled in the middle of July.
Barclay’s is Britain’s third-largest bank by asset and Absa is South Africa’s fourth largest.
The British bank is also among several international firms sued in foreign courts by Khulumani, a body that represents some victims of apartheid.
Giyose said Barclays supported the previous government in three strategic areas: finance, energy and defence.
Taylor said Barclays’ loans to South Africa between 1982 and 1984 amounted to $725,4-million.
Between 1972 and 1978, Barclays helped the apartheid government obtain almost $500-million in loans, Taylor said.
”This support kept the doors open to international capital and kept mechanised infantry on the move in the townships and neighbouring countries,” he said.
Giyose added: ”Absa is becoming a tainted company by the fact that it is facilitating and arranging this takeover of itself by Barclays.
”I want to state this position very categorically: we are not impressed by the fact that people keep on telling us that Barclays is bringing in so much money back to this country.
”We know, clearly, that Barclays is a greedy company. It is coming here in pursuit of its greed for investment.
”We are prepared that the people of this country participate in an economy where there is modest prosperity for all, especially blacks,” Giyose said. — Sapa