Public Protector Busisiwe Mkhwebane has touched on two highly contentious issues: the unresolved bailout for a local bank three decades ago and the role of the country's Reserve Bank, says Professor Alan Hirsch.
Public Protector Busisiwe Mkhwebane has ignited a flaring grass fire with recommendations around a R1.2bn bailout paid to a local bank between 1986 and 1995. Known as the "Bankorp/Absa lifeboat", the payment has been a bone of deep contention, with investigations and reports stretching back to the first presidents of South Africa’s democracy, Nelson Mandela and Thabo Mbeki.
The public protector’s recommendations on the bailout – set out in a report released this week – are provocative. The first is that there should be a new investigation by the country’s elite investigative team into the obligations of one of South Africa’s largest banks, Absa, to pay back the considerable sum. Absa was formed in 1991 following the amalgamation of eight banks, including Bankorp. Absa was later acquired by Barclays and currently trades as Barclays Africa. Essentially, this means calling on Barclays Africa to pay for the sins of one of its distant ancestors.