Absa’s claim that it had no knowledge of irregular lending practices at its Zimbabwe associate, the Jewel Bank, is ‘nonsenseâ€, says a senior employee formerly stationed at the Harare bank.
In August, reports revealed that the Jewel Bank — then known as the Commercial Bank of Zimbabwe (CBZ) — in which Absa has a 25% stake, had helped Zimbabwe’s Central Intelligence Organisation (CIO) acquire a stake in two privately owned newspapers. This happened under the stewardship of the then MD Gideon Gono, now Zimbabwe’s Central Bank governor.
At the time, Absa said it had no operational control and thus no knowledge of the bank’s day-to-day activities.
Tom van Heerden, seconded by Absa to Jewel Bank as senior credit manager in 1998, this week told the Mail & Guardian: ‘There is no way they [Absa’s South African management] could not have known.â€
Van Heerden said he had told Absa that Gono ‘lent out money left, right and centre without authorisationâ€. Van Heerden’s immediate boss at Jewel, director for credit and now CEO of the bank Nyasha Makuvise, was a ‘willing sidekick†who did not oppose Gono. All of Van Heerden’s attempts to have loan transactions turned down were thwarted by Gono and Makuvise’s combined approval.
Van Heerden’s Harare tenure ended in 2000, two years before the CIO transaction. But during his time, he said he regularly informed his South African bosses about flagrant disregard for procedure and the bad shape of Jewel Bank’s debtors’ book.
His direct South African contact was Lukas de Swart, who was general manager, people management services. Absa spokesperson Errol Smith said De Swart was ‘probably retiredâ€.
Van Heerden said Gono’s generous lending practices were extended to a wide range of clients including Zimbabwe company Chitchem, National Railways of Zimbabwe and Zisco Steel, as well as individual Zimbab-wean business people.
On the debtors’ book, Van Heerden found the bank did not make adequate provision for bad debts. Stated properly in accounting terms, the book would probably have rendered the bank insolvent.
Van Heerden’s continued disagreements with Gono and Makuvise led to his stint ending before December 2001, as originally scheduled. The end began with an attempt to suspend him. In a letter, dated September 2000, Absa noted, ‘there were sufficient grounds to continue with a disciplinary inquiryâ€, adding ‘we have found that the relationships between yourself and your superiors at CBZ have deteriorated to the point that no viable basis exists to continue with the employment relationâ€.
The letter refers to ‘incompatibility†between Van Heerden and ‘the managing director [Gono] and credit director [Makuvise]â€. Van Heerden believes that, for Absa, ‘their stake was more important†than the concerns he was raising.
This week, Smith continued to insist that Absa had no operational control of Jewel Bank. He said the bank was not a subsidiary but an associate in which Absa held a minority stake. He refused to respond to Van Heerden’s claims, but said they had never arisen at board level, where Absa had representation. Smith said this suggested the matter was resolved internally.
Smith said Van Heerden’s deployment to Jewel did not constitute operational involvement, but was ‘part of the price, and related to technology and skills transferâ€. Van Heerden’s secondment agreement was between Absa, Van Heerden and CBZ.