Now that Jacob Zuma has been elected to run the country for the next five years one has to wonder if the banks helped fund his election campaign? If he had been kicked out, would they have to call up all the money he owes them.
Some interesting reading in an article published by Stephan Mulholland which makes one wonder about banks who are supposed to be pillars of moral standing – and they deal with our money…..
THIS IS THE BUSINESS: Our banks sink into a pit of corruption
by Stephen Mulholland, 16 December 2012, 08:53
BANKS have three basic sources of cash: shareholders’ funds, depositors’ funds and other loans and the revenue they earn on these.
This is aided and abetted, of course, by those endless, complicated schedules of exorbitant fees which no one, including those who design them, appears to understand.
Banks are licensed by the state to accept, and safeguard, our deposits and are expected to abide by high standards of probity and responsibility.
Theirs is a sacred obligation, one which is a pillar of any modern economy and whose balanced and moral behaviour is essential if society is to function efficiently.
It was thus disturbing to learn in the brilliant Mail & Guardian report on the KMPG investigation into the financial affairs of President Jacob Zuma and others how some of our major banks played fast and loose with shareholders’ and depositors’ money to curry favour with our political elite.
These bankers ladled out millions to a proven and reckless spendthrift with an appalling credit record, a known defaulter notorious for spending well in excess of his means on properties, cars and so forth while consistently dishonouring his obligations, like any common schlenter.
They advanced him money for one reason only: to buy political capital.
Those banks – Standard, Absa and FNB – are as guilty as sin of influence peddling, a crime in the US and other jurisdictions.
In the full knowledge that Zuma was a totally unreliable borrower, this is what Absa business centre manager Raymond O’Neil put in writing to his colleagues and superiors: “[Zuma’s] bank balance was the last item on his mind, with more important matters regarding the country and the province to deal with.”
O’Neil went on: “We recommend the opening of the Unique package account for Minister Zuma based on his strategic positioning and importance to the group.” This was after O’Neil acknowledged that he was aware of Zuma’s bad credit record with Standard and Nedbank.
It gets worse. O’Neil then told his bank that Zuma was likely to be elected deputy president and that Nelson Mandela was going to settle his debts. Mandela did come to the party with R2-million for Zuma, which then disappeared into various corners but for a paltry R100000 left in the permanently overdrawn Zuma account.
Absa went further and signed Zuma up as a “private client”, a status then reserved for those with at least R1-million spare for investment. Zuma never had R1 to spare, never mind R1-million.
His private client status was noted in the bank’s records as a political decision, which the M&G says was “seemingly in line with [then] chief executive Nallie Bosman’s view, stated in bank records, that ‘in terms of all financial matters’ Zuma was considered a strategic client”.
This “strategic” client immediately plunged into a huge overdraft which elicited this comment: “The conduct leaves much to be desired, but we have little option but to live with this client in view of his position.”
Standard Bank, which apparently escaped unscathed from Zuma’s shenanigans, cancelled his much- abused credit card and obtained a court order against him.
This did not deter FNB from approving a R900000 bond against the fabled Nkandla compound, chicken feed, of course against the R240-million odd of taxpayers’ money now sunk into that remote hideaway.
In support of this bond an FNB official wrote: “I am sure that the powers that be will assist where we need to bend the rules a little.”
Asked for comment last week FNB responded: “When evaluating risk in a loan application there are cases where we apply management discretion and judgment to determine lending decisions.
There are some loan applications that require discretion and our objective remains to ensure we are making the correct decision in determining the likelihood of repayment of the loan. Reference to bending the rules should be interpreted as management applying its discretion.”
It is sad to see our great institutions sinking into that stinking pit of corruption that many of our ruling political elite inhabit. What a sad example they have set.
* This article was first published in Sunday Times: Business Times
Just a passing thought – what do the banks tell their shareholders when the arrears figures go up, and it is due to the high profile political players not paying what they owe? And 10 out of 10 to Standard Bank for cancelling his credit card and taking it to court!!
O’ yes, I was told to include a bit about the above views being expressed are those of the author / blogger and that is is not the view of the banks mentioned, and that although it may be acceptable to me it does not represent the views and policies of my employer.