Ralph Mathekga

The Absa report is a political game changer

2017-01-16 08:44
Public Protector Busisiwe Mkhwebane (City Press)

Public Protector Busisiwe Mkhwebane (City Press)

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Recently appointed Public Protector Busisiwe Mkhwebane has fired her first salvo in office, releasing a report that implicates one of the major banks in wrongdoing.

Mkhwebane’s report details how banking giant Absa unduly benefitted from a state sponsored financial bailout towards the end of apartheid in the 90’s.

Detailing how Absa was secretly bankrolled by the state during apartheid years, Mkhwebane’s reports recommends that the bank pays back R2.2 billion that it received from state coffers.

This report is political dynamite and it will be used as ammunition in the war between political elites and the private sector in general. The details of the bailout are too complex to go into, at times involving transactions that were designed to ensure that the details of the money that went to Absa never see the light of the day.

Remember when a tiny organisation called Black First Land First stormed former Public Protector Thuli Madonsela’s office and demanded that she complete investigations into apartheid era looting that saw repatriation of money that belong to South Africans? The group accused Madonsela of focusing on narrow, small investigations that seek to embarrass the ANC-led government. They wanted her instead to focus on major issues including corruption in the private sector and how some private companies benefitted from state capture.

Mkhwebane seems to have listened. She has released a preliminary report on the mysterious disappearance of public funds as apartheid was winding down.   

Whether she intended it or not, the report on Absa adds a different flavour to the entire idea of state capture. It could possibly neutralise the pending tussle regarding Madonsela’s recommendations that President Jacob Zuma should appoint a commission of inquiry into matters relating to state capture. 

Among Mkhwebane’s recommendations is that the president should consider appointing a commission of inquiry into the matter. Absa has released statements to the effect that the report carries factual inaccuracies and promised to set the record straight.

What is even more interesting about this report is that it also states that some former treasury officials, including Trevor Manuel, were against the idea that Absa has to pay back the money following earlier investigations into the matter. Their position was that it would ruin the economy to have Absa repay the money.

This then raises concerns that some politicians, particularly those who served under the Mbeki administration, had cozy relationship with the private sector, including Absa. What lends credibility to this argument is the revolving door situation that saw former high-ranking treasury figures such as Mario Ramos joining Absa.

The Absa report comes amidst an increasingly tense standoff between President Zuma’s allies in government and the major banks after the banks decided to cut off banking facilities for the Gupta family, pushing the former to increase pressure on the banks to reopen the accounts.

Absa is one of the banks that closed Gupta accounts on the allegations that the family might be involved in money laundering. Now Mkhwebane has hit Absa with the biggest bill of money laundering, R2.2 billion. Who is the mega fraudster now?

If indeed Mkhwebane’s report is accurate, it would be a great embarrassment to the banking sector in general given that it has recently joined that anti-corruption crusade against Zuma.

Mkhwebane stated earlier that she intends to do things differently than her predecessor. If this is her way of doing things differently, going after corruption in the private sector, she would earn respect as a worthy successor to Madonsela.  

But her latest report comes in suspiciously handy for those who want to drive the narrative that state capture was underway long before the Guptas landed on our shores and that the private sector in South Africa is not as clean as it appears.

When corruption becomes as extensive as it is becoming in South Africa, investigations will always have multiple implications and different characters will use these investigations for some of their political goals. Some of the best developments in our fight against corruption will come through people with sinister motives.

The Absa report might smack of sinister motives, but it is a win for South African democracy and transparency. The report changes the narrative of state capture altogether; it says the problem is bigger than we might have thought.    

- Ralph Mathekga is an independent political analyst and author of the book When Zuma Goes. He writes a weekly column for News24.

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.



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