Minister takes charge at Postbank

2011-09-03 12:27

Communications Minister Roy Padayachie announced this week that he had set up a ministerial oversight committee to monitor and speed up the introduction of state-owned Postbank into the country’s mainstream retail banking.

This has led to speculation that he is worried about shenanigans at Postbank’s parent company, the South African Post Office (Sapo), and wants to keep close tabs on Postbank’s corporatisation. The corporatisation of Postbank means it will be run like a commercial entity that competes with established retail lenders for low-income consumers.

Padayachie’s close involvement in Postbank’s affairs comes as three Sapo senior executives, including chief executive Motshoanetsi Lefoka, are facing a disciplinary process for their role in the improper awarding of a R425 million lease tender to relocate the head office of the postal and banking parastatal from the Pretoria CBD to Centurion.

Lefoka, with John Wentzel, Sapo chief operating officer and acting managing director of Postbank, and Marietjie Lancaster, head of strategy, are ­being disciplined for allegedly breaching the Public Finance Management Act by failing to advertise the lucrative contract and putting it through a competitive tender bidding process.

Postbank’s conversion into a retail lender from a savings institution will require it to undergo a corporatisation process. However this process has also been hit by tender rigging allegations.

The South African Postal Workers Union (Sapwu) recently publicly accused Sapo of flouting procurement procedures in the tender to appoint a strategic adviser to help Postbank with its corporatisation plan. Sapwu questioned why the tender was awarded to accounting firm PricewaterhouseCoopers (PwC), which allegedly charged R55 million for the job instead of competitor Accenture, which had reportedly quoted R26 million.

However, PwC director Fulvio Tonelli has dismissed Sapwu’s allegations.

“The work was awarded to us on the basis of an open tender process. We will carry on doing the work,” Tonelli said.

Padayachie said the oversight committee – which will include Finance Minister Pravin Gordhan, Sapo board members and the Reserve Bank – would address issues that may hinder Postbank’s corporatisation.

The decision to establish the ministerial committee, known as the Project Oversight Committee, was taken after Padayachie met with Sapo last week to discuss plans to launch Postbank as a retail lender.

“Following my meeting with Sapo and having received a detailed report on matters pertaining to the corporatisation process of Postbank, I’m confident that the Sapo board and management are making progress and that Postbank will be able to lodge its application for a licence by December 2011,” said Padayachie.

An industry source familiar with Postbank who declined to be named said the establishment of the ministerial committee was an indication that Padayachie was apprehensive about developments at Sapo.

“If the process was working smoothly there would not have been a need to have two ministers sticking their noses in the Postbank corporatisation,” the source said.

The source said Gordhan’s involvement was good as he had experience in turning around troubled institutions.

“The ministry of agriculture could not run the Land Bank but when it was given to the National Treasury you saw how quickly it was turned around,” the source said.

Postbank’s entry into the retail banking market is expected to give Standard Bank, First National Bank, Absa, and Nedbank and small lenders Capitec, African Bank and U-bank a run for their money. With a deposit base of R6.4 billion, Postbank is ideally positioned to take advantage of Sapo’s 1 448 branches to roll out its services.

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