Prickly Mbeki defends his failure to act on apartheid bailout matter

Former president Thabo Mbeki has denied that government was responsible for failing to recover billions of rands that flowed from unlawful apartheid-era Reserve Bank bailouts.

In a telling and confrontational interview with former public protector Thuli Madonsela, Mbeki chastises her for having “preconceived notions” and conflating the government with the Reserve Bank, an autonomous institution.

In the one-hour, 47-minute recording of the interview, conducted on May 12 last year, Mbeki can be heard getting increasingly frustrated, at one point cutting Madonsela off mid-sentence.

The interview was part of an investigation into allegations of apartheid-era looting of the fiscus and whether the government had a duty to recover the funds.

In a damning preliminary report that could still change “drastically”, the public protector suggested that the government should recover R2.25‑billion from Absa for Bankorp’s “unlawful” bailout.


The report – signed by Madonsela’s successor, Busisiwe Mkhwebane – found that the government had breached the Constitution and the Public Finance Management Act in how it handled an intelligence report by asset recovery company Ciex that said the funds could be recovered from Absa.

During Madonsela’s interview with Mbeki, he is adamant that the government was never involved and that he, as the head of the state at the time, cannot be questioned about the decisions taken by the Reserve Bank, an autonomous institution.

“I don’t remember government having anything to do with that. With regard to the Absa thing … the only person who could have been involved is the minister of finance. I think your best chance is to talk to the minister of finance and the governor of the Reserve Bank,” Mbeki says. “Reserve Bank matters don’t come to Cabinet. The autonomy of the Reserve Bank functions in a particular way.”

Madonsela asks why the government did not make a decision on recovering the money. Mbeki interjects in frustration: “The bank, the bank, mani, not government!”

This week, the Thabo Mbeki Foundation said it would rather comment directly to the public protector’s office.

In the interview, Mbeki explains how British intelligence officer Michael Oatley was contracted to recover the funds he claimed had been illicitly given by the apartheid government to banks and individuals in the country and abroad.

But Oatley did not deliver, Mbeki says. “In the end, from what I recall is that he didn’t bring any money because the agreement was that he would locate the money, bring it back and then obtain commission on the money that he brought back.

“At some point a decision was taken that this man was playing games with us. And we decided that let’s just terminate this thing because it wasn’t going to go anywhere.”

Also present during Mbeki’s interview was his lawyer, Marumo Moerane. He said Judge Willem Heath’s investigation was an official inquiry by the Special Investigating Unit and had powers to investigate, pursue the money and go after those found to be liable.

Moerane said Heath took a conscious decision, as an organ of state, not to demand repayment from Absa. “Wouldn’t that, at that time, have absolved government of any responsibility to demand repayment if a state institution which had investigated this decides not to demand it?” Moerane asks.

But Madonsela, on the recording, does not seem convinced and refers to the constitutional mandate of the highest office in the land. “Pursuing that money didn’t need Mr Oatley any more. Government could have at that stage requested all the documents relating to the lifeboat and determined on its own whether the money was recoverable,” she says.

Madonsela says that, lifeboat or no lifeboat, governments are not in the business of giving gifts. “Government got advice … it was never a loan or a lifeboat; it was just illegally, corruptly, given to Absa because Bankorp was never in peril,” she says.

Explaining why the government did not act, Mbeki says the Reserve Bank and treasury considered the matter and could not, at that time, destabilise the banking system.

“What I was trying to say to you is that you see … you shouldn’t come to this thing with any preconceived notions about management of finances. You shouldn’t, really, is my genuine advice. What you are going to need to do is to sit down with Tito [Mboweni] and Trevor [Manuel],” says Mbeki.

“They are very rational people. They may very well say that: ‘Yes, we know that the money was given illegally to Bankorp, which became Absa. But we decided that it was important in order to maintain stability in the financial system and let’s not take this money and let it be.’ They may very well say that,” says Mbeki.

Listen to the full interview below

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Athandiwe Saba
Athandiwe Saba

Athandiwe Saba is a multi award-winning journalist who is passionate about data, human interest issues, governance and everything that isn’t on social media. She is an author, an avid reader and trying to find the answer to the perfect balance between investigative journalism, online audiences and the decline in newspaper sales. It’s a rough world and a rewarding profession.

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