Absa asks court to set aside Public Protector’s report

Absa Bank filed a replying affidavit on Monday to the Public Protector’s responding affidavit in which it accused the protector of failing to conduct a fair and unbiased investigation that “failed to adhere to the standards demanded of an organ of state in litigation”.

The ongoing case relates to the remedial action the Public Protector recommended in her report into the Bankorp ‘Lifeboat’ loans extended by the South African Reserve Bank (Sarb) in the 1980s and 1990s. The Public Protector determined that Absa unlawfully benefited from the loans when it later acquired Bankorp at fair value in 1992. The Public Protector, in her final report, instructed that an amount of R1.125 billion be recovered from Absa.

Absa takes particular umbrage with the way in which the Public Protector has flip-flopped in her affidavit on the issue of recovering the money. “The answering affidavit [of the Public Protector] attempts to portray the remedial action as nothing more than a request that yet another investigation be undertaken into recovery of such funds from some other yet to be identified persons.”

In addition, Absa contends that the Public Protector’s answering affidavit seeks to introduce new justifications and reasoning in support of the unlawful remedial action. “The new reasons, which did not inform the Public Protector’s report, have never been put to Absa for a response before the report was issued. In Absa’s view, apart from being legally impermissible, these attempts amount to an admission that the report cannot stand on its own,” said Absa in a statement accompanying its affidavit.

Absa also points out in its papers that the Sarb had previously asked for an explanation of what had transpired in the meeting between the President of the Republic and the Public Protector that took place on June 7 of this year, a few days before the Public Protector issued its final report into the matter. Absa notes the Public Protector did not address this in its answering affidavit.

The affidavit also points out what appears to be different standards applied to the other institutions ‘implicated’ in the Lifeboat transaction. While the Public Protector instructed the Special Investigating Unit (SIU) to recover the money from Absa, the language applied to other related parties included “investigating alleged misappropriated public funds”. In Absa’s case unlawfulness was implied, whereas for the others potential unlawfulness should be investigated. So, why the difference?

Absa calls the whole reason for the investigation a sham. It points out that there have already been two investigations prior to the Public Protector’s – by the SIU, conducted by Judge Heath, as well as the Davis Panel. “The remedial action is not aimed at a bona fide investigation. It is aimed at a prescribed outcome that differs from the outcomes of previous investigations.”

And that outcome, as we have since learnt, and perhaps in consultation with the President, was to get the SIU to recover money from Absa that it had purportedly unlawfully benefitted from as a result of buying Bankorp.

It is for these reasons Absa would like the report reviewed and set aside. And for the Public Protector to pay its costs.

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