Finance committee grappling with Viceroy status

Parliament’s Standing Committee on Finance grappled with the status of Viceroy Research, an organisation which released explosive reports on two financial institutions in SA, Capitec Bank and Steinhoff.

National Treasury’s head of tax and finance sector policy Ismail Momoniat said on Tuesday that while the allegations in the Viceroy Report were being looked at by various institutions, the status of Viceroy as a company made it difficult for South Africa to hold the organisation or its report responsible.

The National Credit Regulator and the Financial Services Board gave accounts of VBS Mutual Bank and Capitec Bank before Parliament’s Standing Committee on Finance on Tuesday morning.

The committee sat to get to the bottom of governance questions for the two beleaguered financial institutions as the two finance regulators gave their own accounts for their compliance to financial sector regulations.

Momoniat said because Viceroy is a foreign organisation, it was not beholden to some of the rules imposed on local organisations when it came to reporting on the governance of financial institutions.


A Treasury official read out a statement from Viceroy in which it said that its reports were compiled “in the public interest” and that these reports should not be considered as trade advice.

Economic Freedom Fighters chief whip Floyd Shivambu told the committee that it should avoid being preoccupied with the correctness of Viceroy’s role.

“These presentations are not helpful. Instead of dealing with the substance of what Viceroy is presenting, everyone is dramatising the supposed lack of integrity of Viceroy. These are substantial arguments they are raising and no one can avoid that,” said Shivambu.

VBS Mutual Bank

VBS Mutual Bank is currently under curatorship over liquidity concerns related to municipal withdrawals. NCR CEO Nomsa Motshegare said her organisation’s experience of VBS Mutual Bank was that they were always on time when it came to paying their renewal fees.

“Banks own 81.9% of R1.73-trillion debtors book of consumer credit in South Africa. VBS Mutual Bank has only 0.05% of share of the banks’ credit book. Capitec Bank has 3.24% of the banks’ share of debtors’ book. VBS lends to consumers in rural areas and townships,” said Motshegare.

She said in 2017, 90 complaints were received from consumers regarding Capitec Bank’s compliance and that 86% of these complaints were resolved.

Motshegare said the nature of complaints against banks related to reckless lending, outstanding balances and terminations from debt review.

“In Capitec multiple loans being issued to a consumer within a short space of timer were discovered. This conduct is not necessarily in contravention of the National Credit Act, but concerns raised were about potential risks to consumers and the bank,” said Financial Services Board deputy executive officer Jurgen Boyd.

He said the board had to take into account the number of accusations levelled against Capitec when assessing it for compliance in its ongoing investigations.

“We have received complaints of insider trading and false statements. We are restrained in what we can disclose. We have a jurisdiction to investigate matters relating to the governance of financial institutions,” said Boyd.

He said the FSB is currently in the process of studying Capitec’s responses to reports into the matters where they have been mentioned. He assured the committee that the FSB would assess the bank’s compliance thoroughly.

“Shorting is not, in and of itself, illegal but it is important to understand the motive of anyone who says anything in this regard. We have issued summonses and will interrogate persons that we think have information relevant to our investigation,” he said. — Fin 24 

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Khulekani Magubane
Khulekani Magubane

Khulekani Magubane is a senior financial reporter for Fin24. 

Advertising

Sassa disses disability grant applicants

Towards the end of level four of the lockdown, Sassa offices reopened for applications for old age pensions and childcare and foster care grants, but not for disability grants

Gauteng health MEC Bandile Masuku’s first rule: Don’t panic

As Gauteng braces for its Covid-19 peak, the province’s MEC for health, Bandile Masuku, is putting his training to the test as he leads efforts to tackle the impending public health crisis
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday