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Banks will have to come explain about credit following intervention by FF Plus

Banks will in due course have to appear before the parliamentary portfolio committee on Trade and Industry about their credit practices and in particular the extending of unsecured loans, Adv. Anton Alberts, the FF Plus’ parliamentary spokesperson on Trade and Industry says.

According to Adv. Alberts he requested the chairperson of the parliamentary portfolio committee in the light of the African Bank (Abil) debacle where the Reserve Bank has now had to intervene with a rescue plan of R10 billion to save the bank from going under. The request was acceded to.

Adv. Alberts says what is especially worrying is the fact that African Bank had possibly misled the portfolio committee last year when the bank had to inform the committee about their practices and answer questions of the committee about, amongst others, credit practices.

“The committee at the time expressed its concern about credit practices, especially about African Bank, but the reply was that there are no problems. It now appears that the committee was possibly misled as the bank already at that point should have known of its problems.

“If intentional deception did occur, it is contempt and the undermining of Parliament and constitutes a contravention of the Parliamentary Powers and Privileges Act and action can be taken against the relevant officials of the bank,” Adv. Alberts said.

In the mean time investors who had to hear that they had lost money on money markets as a result of their exposure to African Bank, are shocked and dissatisfied.

Regarding this, Adv. Alberts said it is unheard of in the country’s history as banks usually give investors an assurance that their capital is safe. In this case, banks and other institutions had invested in African Bank despite clear signs that the bank has problems.

“Clients, who had lost money, will be holding talks with the FF Plus about the issue as some of their funds were used, even after Abil’s shares had been suspended and the relevant banks due diligence for further investments had clearly been inadequate.

“In the light of this, their certainly could be legal implications for the relevant banks and institutions,” Adv. Alberts said.

 

Contact no.: 082 391 3117 / 083 419 5403

 

 

 

 

 

 

 

 

 

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