SOUTH Africa’s big four banks have been fined R125m by the Reserve Bank for failing to have appropriate measures to ensure compliance with the provisions of the Financial Intelligence Centre Act (Fica).
Standard Bank was slammed with the highest financial penalty of R60m, FirstRand was hit with R30m, Nedbank R25m and Absa R10m.
Standard Bank was found to have failed to meet its obligations to report cash transactions above R24,999.99 to the financial intelligence centre. It was also criticised for slack controls for detecting property associated with terrorist activities.
The bank said in a statement it had taken “immediate remedial action to address the issues identified” and initiated a programme to address the findings.
Absa, FirstRand and Nedbank were also penalised for keeping inadequate customer verification details and transactional records.
In terms of Fica, the Reserve Bank is tasked to supervise and enforce compliance with Fica rules to ensure that banks have controls to deal with money laundering and combat the financing of terrorism.
However, the Reserve Bank said the fines did not mean that South Africa’s big four banks had in any way facilitated transactions involving money laundering and the financing of terrorism.
All the big-four banks were directed to take remedial action to address weaknesses when it comes to identifying and verifying customers’ details.
Earlier in the year, Standard Bank plc in the UK was hammered with a £7.6m fine by the UK’s Financial Conduct Authority for failures in its money laundering controls and procedures over corporate customers connected to politically exposed persons.
Source: Business Day
Showing posts with label FNB. Show all posts
Showing posts with label FNB. Show all posts
Wednesday, April 16, 2014
Friday, January 25, 2013
FNB: You Can Help campaign is regrettable
FNB met with the leadership of the ANC, led by its secretary general Gwede Mantashe on Thursday. The bank apologised to the ANC on Friday.
"The CEO of FirstRand, Mr Sizwe Nxasana, agreed that the research clippings that were posted online were regrettable; he apologised for the posting of the research clippings online," the ANC said in a statement.
"He then assured the meeting that this regrettable incident will not be repeated."
The FNB campaign features a number of videos of children in school uniform reading their hopes for the country. Opposition parties and activist groups said the ANC's criticism of the campaign showed its intolerance.
During the meeting, the ANC pointed out that the video clips were a deliberate attack on the ANC.
The clips fed into the opposition narrative that sought to project the ANC and government in a negative manner, it said.
The ANC said the clips had a negative impact on business confidence and could undermine the promotion of investment into the country.
"The ANC indicated that its leadership and membership were strongly raising a question why the organisation should continue to bank with a bank that has adopted an oppositional (sic) stance to it."
Nxasa explained to the ruling party the objectives of their youth campaign and stressed that it was meant to inspire all South Africans to work together by helping one another.
FNB expressed its commitment to the National Development Plan in addressing the areas of poverty, inequality and unemployment, the ANC said on Friday.
Source: Mail & Guardian
"The CEO of FirstRand, Mr Sizwe Nxasana, agreed that the research clippings that were posted online were regrettable; he apologised for the posting of the research clippings online," the ANC said in a statement.
"He then assured the meeting that this regrettable incident will not be repeated."
The FNB campaign features a number of videos of children in school uniform reading their hopes for the country. Opposition parties and activist groups said the ANC's criticism of the campaign showed its intolerance.
During the meeting, the ANC pointed out that the video clips were a deliberate attack on the ANC.
The clips fed into the opposition narrative that sought to project the ANC and government in a negative manner, it said.
The ANC said the clips had a negative impact on business confidence and could undermine the promotion of investment into the country.
"The ANC indicated that its leadership and membership were strongly raising a question why the organisation should continue to bank with a bank that has adopted an oppositional (sic) stance to it."
Nxasa explained to the ruling party the objectives of their youth campaign and stressed that it was meant to inspire all South Africans to work together by helping one another.
FNB expressed its commitment to the National Development Plan in addressing the areas of poverty, inequality and unemployment, the ANC said on Friday.
Source: Mail & Guardian
Wednesday, January 23, 2013
Reaction to FNB advert like Lady Macbeth’s guilty rants
It is never a good sign when an organisation or individual completely overreacts to perceived criticism. As the simmering discontent of South Africa’s underclass boils over into open revolt and violence and as corrupt shoot-to-kill cops are increasingly deployed in places as far flung as Marikana, De Doorns and Sasolburg to protect the old and new elites from the wrath of the dispossessed, some politicians are increasingly resembling Lady Macbeth, driven by their guilt and shame to commit ever more heinous misdeeds. The hysterical and often undemocratic response of various ANC and SACP structures to the silly First National Bank (FNB) advertising campaign is a case in point.
In Shakespeare’s “Macbeth”, Lady Macbeth urges her husband to kill Duncan, the king, to allow Macbeth to satisfy his ambitions of becoming king. She overrides all of her husband’s objections by challenging his manhood and he relents and kills Duncan. Later Lady Macbeth becomes racked with guilt and sleepwalks through the palace, haunted by the murder of the former king. In this trance she tries to wash off imaginary bloodstains from her hands, shouting: “Out, damned spot! Out, I say!—One, two. Why, then, ’tis time to do ’t. Hell is murky!—Fie, my lord, fie! A soldier, and afeard? What need we fear who knows it, when none can call our power to account?—Yet who would have thought the old man to have had so much blood in him.”
The response of the ANC, the ANC Youth League and the SACP to the FNB campaign resembles the attempts of Lady Macbeth to clean imaginary bloodstains from her hands.
“What need we fear who knows it, when none can call our power to account?”
The FNB campaign includes videos of young South Africans apparently speaking their minds. In one of the videos a participant says: “Stop voting for the same government in hopes for change – instead, change your hopes to a government that has the same hopes as us.”
The ANC Youth League and SACP joined the ANC in slamming the campaign, with the league saying it was “deeply angered and disappointed” by the bank’s “treacherous” campaign. On Sunday, Youth League spokeswoman Khusela Sangoni-Khawe said FNB had failed in trying to “recreate an Arab Spring of some sort in South Africa” and said it “uses children to make unproven claims of a government rife with corruption. We call upon South Africans to close ranks against what is a treacherous attack on our country.”
ANC spokesperson Jackson Mthembu said the ANC (who is never directly mentioned in any of the videos) was “appalled” by the campaign in which the ANC, its leadership and government were “under attack” the campaign was an “undisguised political statement that makes random and untested accusations against our government in the name of discourse. While we believe that people are entitled to their views, we don’t accept that young kids should be used as proxies to articulate political views espoused, as in the case of the FNB advertisement.”
“Out, damned spot! Out, I say!”
These vehement reactions to what appear to be rather mild criticisms of the government and platitudes about one’s right to vote for the party of one’s choice (widely accepted in any functioning democracy) are curious for several reasons.
First, whatever one might think of FNB and its advertising campaign (and I am not a fan of the campaign or of the lily-livered manner in which the bank caved in to political thugs), the manner in which several ANC and SACP spokespersons conflated the ANC with the state and with the country is worrying. The ANC is not the state. Neither is it the sole representative of the South African people. South Africa, in the words of the Freedom Charter, belongs to all who live in it – it does not belong to the ANC. Like any political party, the ANC deserves to be praised when it does something well and deserves to be criticised when it abandons the poor that it professes to love and serve.
Second, the statement that the FNB campaign is treacherous and tries to recreate the Arab Spring, is anti-democratic and – I am sorry to have to use such an emotive term – proto-fascist. There is nothing wrong with telling people that they should refrain from voting for the governing party. Voting for whomever one pleases is at the heart of political freedom in a democratic state. Every democratic election is based on a fair and free contestation between political parties in which we are all allowed to express our preferences.
We are also all free to try and convince others to vote for the ANC, to vote for the DA, or to vote for the TP (Tender Party), for that matter. It is probably not a great business model for a Bank to get involved in an advertising campaign that might alienate the majority of voters, but if it does, there is nothing treacherous about it. If FNB had not pulled the adverts I might even have lauded the bank for putting its principles (which one may agree or disagree with) before naked profits.
The Arab Spring refers to various uprisings organised by oppressed populations in countries where citizens did not enjoy political rights and where democratic contestation and free and fair elections could not be held. To refer to an advertising campaign in which a teenager urges people in South Africa to vote for the party of their choice as an attempt to recreate an Arab Spring, suggests the ANC Youth league believes that South Africa is not a democracy, that its citizens are oppressed and do not enjoy political rights and that they will never be allowed to change the government by using their vote. Like Lady Macbeth wandering in a trance and trying to wash off imaginary bloodstains from her hands, the ANC Youth League is revealing rather more than it intended about its own undemocratic tendencies. Pity Jackson Mthembu will not display the same sense of outrage about this full-frontal attack on our democracy.
Whether one is a staunch ANC supporter or a supporter of the right wing Freedom Front Plus, if one supports democracy one will not be appalled by the fact that an institution has dared to criticise a political party. Only proto-fascists would be appalled by the fact that a bank has dared to broadcast statements criticising the government.
One might, of course, disagree with the sentiments expressed by the youngsters in the FNB produced videos, and the ANC has every right to express its disagreement with some of the statments made by the youngsters. But claiming that the sentiments are treacherous or that it is not legitimate to criticise the party displays the kind of undemocratic intolerance that cannot be associated with a party who supports democracy.
Personally I find that it is better to ignore attacks that are far-fetched or motivated by racism, hatred or a complete lack of information. That is what I do when I am criticised for something I have written. “Don’t feed the trolls,” I tell myself every time I read the unhinged invective of faceless loonies on my Blog. If the criticism is serious, one either responds to it by pointing out why and how it is wrong, or one takes it on board and changes one’s behaviour. Just a thought: use it, don’t use it.
One does not tell those who criticise that they are committing treason or that they are attacking the state merely because one happens (for the time being) to be the party of government.
I was reluctant even to enter this discussion, not because I am fearful of repercussions, but because what I have written here is so obvious and because all this fuss about a bank’s advertising campaign detracts attention from the far more important social and economic issues facing the country.
Maybe that is why the campaign has attracted such hysterical responses from the ANC and its partners. Like Lady Macbeth, whose paranoid dreams symbolises the fact that she is haunted by her guilt, the ANC reaction is perhaps a symptom of the fear and guilt that stalks the political class in South Africa. As Marikana, De Doorns and Sasolburg have shown, the poor, economically excluded and marginalised members of society have not benefited as handsomely from the end of apartheid as the members of the old (mostly white) and emerging (mostly black) middle classes.
While those in the chattering classes squabble about silly adverts made to promote the commercial interests of a big bank and argue whether these adds exploit children, many of those same children are dropping out of school or receiving a third rate education because of the cowardice of politicians who are too scared to take on a powerful union. While I write about the nature of democracy, members of social movement are harassed and tortured by the police. While Helen Zille spends her days on twitter, blaming the poor for the lack of services in their communities in Cape Town, millions of South Africans go to bed hungry, wondering whether this wonderful democracy will ever guarantee them a full stomach.
Source: Constitutionally Speaking
In Shakespeare’s “Macbeth”, Lady Macbeth urges her husband to kill Duncan, the king, to allow Macbeth to satisfy his ambitions of becoming king. She overrides all of her husband’s objections by challenging his manhood and he relents and kills Duncan. Later Lady Macbeth becomes racked with guilt and sleepwalks through the palace, haunted by the murder of the former king. In this trance she tries to wash off imaginary bloodstains from her hands, shouting: “Out, damned spot! Out, I say!—One, two. Why, then, ’tis time to do ’t. Hell is murky!—Fie, my lord, fie! A soldier, and afeard? What need we fear who knows it, when none can call our power to account?—Yet who would have thought the old man to have had so much blood in him.”
The response of the ANC, the ANC Youth League and the SACP to the FNB campaign resembles the attempts of Lady Macbeth to clean imaginary bloodstains from her hands.
“What need we fear who knows it, when none can call our power to account?”
The FNB campaign includes videos of young South Africans apparently speaking their minds. In one of the videos a participant says: “Stop voting for the same government in hopes for change – instead, change your hopes to a government that has the same hopes as us.”
The ANC Youth League and SACP joined the ANC in slamming the campaign, with the league saying it was “deeply angered and disappointed” by the bank’s “treacherous” campaign. On Sunday, Youth League spokeswoman Khusela Sangoni-Khawe said FNB had failed in trying to “recreate an Arab Spring of some sort in South Africa” and said it “uses children to make unproven claims of a government rife with corruption. We call upon South Africans to close ranks against what is a treacherous attack on our country.”
ANC spokesperson Jackson Mthembu said the ANC (who is never directly mentioned in any of the videos) was “appalled” by the campaign in which the ANC, its leadership and government were “under attack” the campaign was an “undisguised political statement that makes random and untested accusations against our government in the name of discourse. While we believe that people are entitled to their views, we don’t accept that young kids should be used as proxies to articulate political views espoused, as in the case of the FNB advertisement.”
“Out, damned spot! Out, I say!”
These vehement reactions to what appear to be rather mild criticisms of the government and platitudes about one’s right to vote for the party of one’s choice (widely accepted in any functioning democracy) are curious for several reasons.
First, whatever one might think of FNB and its advertising campaign (and I am not a fan of the campaign or of the lily-livered manner in which the bank caved in to political thugs), the manner in which several ANC and SACP spokespersons conflated the ANC with the state and with the country is worrying. The ANC is not the state. Neither is it the sole representative of the South African people. South Africa, in the words of the Freedom Charter, belongs to all who live in it – it does not belong to the ANC. Like any political party, the ANC deserves to be praised when it does something well and deserves to be criticised when it abandons the poor that it professes to love and serve.
Second, the statement that the FNB campaign is treacherous and tries to recreate the Arab Spring, is anti-democratic and – I am sorry to have to use such an emotive term – proto-fascist. There is nothing wrong with telling people that they should refrain from voting for the governing party. Voting for whomever one pleases is at the heart of political freedom in a democratic state. Every democratic election is based on a fair and free contestation between political parties in which we are all allowed to express our preferences.
We are also all free to try and convince others to vote for the ANC, to vote for the DA, or to vote for the TP (Tender Party), for that matter. It is probably not a great business model for a Bank to get involved in an advertising campaign that might alienate the majority of voters, but if it does, there is nothing treacherous about it. If FNB had not pulled the adverts I might even have lauded the bank for putting its principles (which one may agree or disagree with) before naked profits.
The Arab Spring refers to various uprisings organised by oppressed populations in countries where citizens did not enjoy political rights and where democratic contestation and free and fair elections could not be held. To refer to an advertising campaign in which a teenager urges people in South Africa to vote for the party of their choice as an attempt to recreate an Arab Spring, suggests the ANC Youth league believes that South Africa is not a democracy, that its citizens are oppressed and do not enjoy political rights and that they will never be allowed to change the government by using their vote. Like Lady Macbeth wandering in a trance and trying to wash off imaginary bloodstains from her hands, the ANC Youth League is revealing rather more than it intended about its own undemocratic tendencies. Pity Jackson Mthembu will not display the same sense of outrage about this full-frontal attack on our democracy.
Whether one is a staunch ANC supporter or a supporter of the right wing Freedom Front Plus, if one supports democracy one will not be appalled by the fact that an institution has dared to criticise a political party. Only proto-fascists would be appalled by the fact that a bank has dared to broadcast statements criticising the government.
One might, of course, disagree with the sentiments expressed by the youngsters in the FNB produced videos, and the ANC has every right to express its disagreement with some of the statments made by the youngsters. But claiming that the sentiments are treacherous or that it is not legitimate to criticise the party displays the kind of undemocratic intolerance that cannot be associated with a party who supports democracy.
Personally I find that it is better to ignore attacks that are far-fetched or motivated by racism, hatred or a complete lack of information. That is what I do when I am criticised for something I have written. “Don’t feed the trolls,” I tell myself every time I read the unhinged invective of faceless loonies on my Blog. If the criticism is serious, one either responds to it by pointing out why and how it is wrong, or one takes it on board and changes one’s behaviour. Just a thought: use it, don’t use it.
One does not tell those who criticise that they are committing treason or that they are attacking the state merely because one happens (for the time being) to be the party of government.
I was reluctant even to enter this discussion, not because I am fearful of repercussions, but because what I have written here is so obvious and because all this fuss about a bank’s advertising campaign detracts attention from the far more important social and economic issues facing the country.
Maybe that is why the campaign has attracted such hysterical responses from the ANC and its partners. Like Lady Macbeth, whose paranoid dreams symbolises the fact that she is haunted by her guilt, the ANC reaction is perhaps a symptom of the fear and guilt that stalks the political class in South Africa. As Marikana, De Doorns and Sasolburg have shown, the poor, economically excluded and marginalised members of society have not benefited as handsomely from the end of apartheid as the members of the old (mostly white) and emerging (mostly black) middle classes.
While those in the chattering classes squabble about silly adverts made to promote the commercial interests of a big bank and argue whether these adds exploit children, many of those same children are dropping out of school or receiving a third rate education because of the cowardice of politicians who are too scared to take on a powerful union. While I write about the nature of democracy, members of social movement are harassed and tortured by the police. While Helen Zille spends her days on twitter, blaming the poor for the lack of services in their communities in Cape Town, millions of South Africans go to bed hungry, wondering whether this wonderful democracy will ever guarantee them a full stomach.
Source: Constitutionally Speaking
Friday, January 18, 2013
FNB launches "You can help" campaign
South Africa is rich in values, tradition and culture, a truly wonderful country, and one that is admired around the world. Yet, as South Africans, we sometimes forget what our great nation has achieved and remains capable of achieving. It is in times like these that we need to be reminded of the greatness inside all of us, and what is possible when help is joined to common purpose and courage to necessity.
At 18:57, on 17 January 2013, FNB launched a new brand campaign with a live broadcast to South Africa. The broadcast carried a message from the voices we don't often hear, the children of our great country. A message we believe will inspire the nation.
In September 2012, we undertook what is likely the most current snapshot of the opinions of the youth, their views on our country and the role of help. Help, not in terms of coordinated interventions, but little, everyday help; and the power help has to make a big difference. The survey was completed by HDI Youth Marketeers, an independent research firm.
In assembling these views and opinions, we spoke to over 1300 learners and students (ages 10 to 22) from around the country and from all walks of life. We learnt that today's youth are losing their innocence, not to apartheid, but to the many social ills and tragedies that came after it. One child said, "If I was President for a day, I would make South Africa safe for children, women and teens who are abused." Another 10-year-old boy added the following, "I get scared when people are killing each other."
But though some of what they had to say was hard to hear, we learnt too that our youth carry inside them a fire that burns with hope and positivity. Their sense of identity is astounding, and they have an unprecedented interest in working as a community to improve our society and environment. A 12 year old said, "When we help people, we make them feel like they're somebody". Another child said, "If we help each other, we raise our country". Yet another student, aged 10, said "In the future I want to live in South Africa... I know South Africa is full of crime, but if I didn't live here I don't know who I would be." A 15 year old said, "We help each other because we are one blood, one soul, with a 13 year old saying, "If we don't help each other, who will help us".
"The intention of the campaign is not to talk about ourselves, but rather to be a brand for betterment by providing the youth of our country with a stage to voice what impacts the daily reality of many South Africans through the lens of our brand's core positioning of 'Help', says Bernice Samuels, FNB Chief Marketing Officer.
"FNB is a brand of high ideals and has a long history of leading from the front, not just in terms of product and service innovation, but also in terms of its social focus on building a stronger, unified and values-based nation, referring to our Praise Singer, Anthem, and Dog ads to mention a few" adds Samuels.
The chosen venue for the live advert, Naledi Secondary School, played an integral role in the events of 1976, a time when the youth of South Africa sent a message that could not be ignored, and in doing so, helped change the future of our country.
Jason Levin, Managing Director of HDI Youth Marketeers said; "The survey provided a good overall snapshot of the South African youth opinion and was hugely rewarding as it helped us gain insight into how the youth view South Africa. The research was truly inspiring. It is only through projects like this, that true feelings are clearly reflected."
FNB also created a dynamic online portal to support the campaign and everyone is encouraged to visit the blog site, youcanhelp.co.za to participate in the ongoing national discussion we believe will be triggered by the campaign. The campaign is integrated across all platforms, including TV, OOH, digital (youcanhelp.co.za) and social media on Facebook and Twitter (#littlehelps).
"All of the great things we've done, we've done together by helping each other. Perhaps it's time for us to listen to the voices we seldom hear, the youth of our country, because it is the South Africa we build today that will be the country they will inherit tomorrow," concludes Samuels.
In Nelson Mandela's words, "If there are dreams about a beautiful South Africa, there are also roads that lead to their goal. Two of these roads could be named Goodness and Forgiveness." Let us join hands in helping to build this beautiful South Africa we all dream of.
Issued by FNB, January 18 2013
Source: Politicsweb
At 18:57, on 17 January 2013, FNB launched a new brand campaign with a live broadcast to South Africa. The broadcast carried a message from the voices we don't often hear, the children of our great country. A message we believe will inspire the nation.
In September 2012, we undertook what is likely the most current snapshot of the opinions of the youth, their views on our country and the role of help. Help, not in terms of coordinated interventions, but little, everyday help; and the power help has to make a big difference. The survey was completed by HDI Youth Marketeers, an independent research firm.
In assembling these views and opinions, we spoke to over 1300 learners and students (ages 10 to 22) from around the country and from all walks of life. We learnt that today's youth are losing their innocence, not to apartheid, but to the many social ills and tragedies that came after it. One child said, "If I was President for a day, I would make South Africa safe for children, women and teens who are abused." Another 10-year-old boy added the following, "I get scared when people are killing each other."
But though some of what they had to say was hard to hear, we learnt too that our youth carry inside them a fire that burns with hope and positivity. Their sense of identity is astounding, and they have an unprecedented interest in working as a community to improve our society and environment. A 12 year old said, "When we help people, we make them feel like they're somebody". Another child said, "If we help each other, we raise our country". Yet another student, aged 10, said "In the future I want to live in South Africa... I know South Africa is full of crime, but if I didn't live here I don't know who I would be." A 15 year old said, "We help each other because we are one blood, one soul, with a 13 year old saying, "If we don't help each other, who will help us".
"The intention of the campaign is not to talk about ourselves, but rather to be a brand for betterment by providing the youth of our country with a stage to voice what impacts the daily reality of many South Africans through the lens of our brand's core positioning of 'Help', says Bernice Samuels, FNB Chief Marketing Officer.
"FNB is a brand of high ideals and has a long history of leading from the front, not just in terms of product and service innovation, but also in terms of its social focus on building a stronger, unified and values-based nation, referring to our Praise Singer, Anthem, and Dog ads to mention a few" adds Samuels.
The chosen venue for the live advert, Naledi Secondary School, played an integral role in the events of 1976, a time when the youth of South Africa sent a message that could not be ignored, and in doing so, helped change the future of our country.
Jason Levin, Managing Director of HDI Youth Marketeers said; "The survey provided a good overall snapshot of the South African youth opinion and was hugely rewarding as it helped us gain insight into how the youth view South Africa. The research was truly inspiring. It is only through projects like this, that true feelings are clearly reflected."
FNB also created a dynamic online portal to support the campaign and everyone is encouraged to visit the blog site, youcanhelp.co.za to participate in the ongoing national discussion we believe will be triggered by the campaign. The campaign is integrated across all platforms, including TV, OOH, digital (youcanhelp.co.za) and social media on Facebook and Twitter (#littlehelps).
"All of the great things we've done, we've done together by helping each other. Perhaps it's time for us to listen to the voices we seldom hear, the youth of our country, because it is the South Africa we build today that will be the country they will inherit tomorrow," concludes Samuels.
In Nelson Mandela's words, "If there are dreams about a beautiful South Africa, there are also roads that lead to their goal. Two of these roads could be named Goodness and Forgiveness." Let us join hands in helping to build this beautiful South Africa we all dream of.
Issued by FNB, January 18 2013
Source: Politicsweb
Tuesday, November 2, 2010
What can be done to make the dispute resolution process more rewarding?
In many instances a party who has suffered some form of loss at the hands of another does not have access to the documents, recordings or data which would enable that aggrieved party to enforce its rights against the perpetrator of the harm.
In the past the aggrieved party would institute action and would subsequently seek access to these documents, recordings or data in the course of the discovery procedures provided for in the court rules. This may mean that the true grounds of the action for recovery are only revealed at a fairly late stage once the discovered documents, recordings or data have been considered. Amendments to the pleadings (resulting in additional costs) may be necessary. At worst the discovery process may make it clear that the wrong party has been sued, and that the aggrieved party ought to have looked elsewhere to make good its loss.
These documents, recordings or data are only available once litigation is at an advanced stage. They may expose solid grounds for liability on the part of the Defendant. Had access to these documents, recordings or data been available at the outset, there would have been a strong incentive for the Defendant to settle the claim without compounding the harm by forcing the aggrieved party to embark on an expensive and time consuming process of enforcing its rights.
In the words of Cameron JA in his dissenting judgement in UNITAS HOSPITAL v VAN WYK AND ANOTHER 2006 (4) SA 436 (SCA) “Litigation involves massive costs, time, personnel, effort and risks. Where access to a document can assist in avoiding the initiation of litigation, or opposition to it, the objects of the statute suggest that access should be granted.”
The statute to which Cameron JA refers is the Promotion of Access to Information Act 2 of 2000 (PAIA). This Act is aimed at giving effect to every person’s right to access to information expressed in Section 32 of the Constitution. Section 32 of the Constitution provides:
Everyone has the right of access to:
(a) any information held by the State; and
(b) any information that is held by another person and that is required for the exercise or protection of any rights.
An aggrieved party can therefore utilise the mechanism provided for in PAIA with a view to accessing documents, computer files, tape or video recordings, email messages and the like.
A decision regarding whether to employ the procedure embodied in PAIA must be made at an early stage of any dispute resolution process. Once legal proceedings (in the form of an action or application launched in a court of law) have commenced, the parties to that legal process are restricted to utilising the applicable court procedures and cannot then seek to apply for access in terms of PAIA.
An application for access to information under PAIA can be directed either at a public body such as a government department or a state owned enterprise, or at a private body such as a natural person or commercial corporate entity. The requirements to be met by an applicant when applying for access to information in the hands of a private body are more onerous, since in addition to meeting the requirements of an application directed at a public body, the applicant must show that the record in question is required for the exercise or protection of a right. The applicant need not disclose the reason for its request, where this is directed at a public body.
There are certain limited grounds on which either a public body or a private body may legitimately refuse to give access, and these include that access would involve unreasonable disclosure of personal information about a third party, or if the record in question contains trade secrets of a third party or information supplied in confidence by a third party which could reasonable be expected to put that third party at a disadvantage in contractual negotiations or commercial competition. Other grounds relate to the endangerment of the life or physical safety of individuals or of security of buildings, transport systems or other property. An obvious exception is a record which is privileged in legal proceedings since one cannot access records under PAIA which would protected from discovery in terms of the normal rules applicable in legal proceedings.
The obvious advantage of the PAIA process is that the aggrieved party will obtain the documentation much sooner. This fact has a number of important implications.
Very often documents, recordings or computer data are lost or destroyed over time. Obtaining copies at an early stage will avoid any prejudice arising from this type of incompetence. If the aggrieved party obtains all relevant records at an early stage it will be better placed, at the outset, to assess the prospects of success of litigation and to focus on the areas most likely to found a solid case at the trial, thus saving time and money. The lawyers representing the aggrieved party in any legal processes which may follow will be armed with the appropriate knowledge required for accurate pleading of the case, meaning that it should not be necessary to make amendments to the pleadings at a later stage, again saving time and money. The prospective Defendant will be in a position, at an early stage, to more accurately assess their prospects of successfully defeating the claim. If the evidence is such that they must accept that there is a high probability of a court finding against them, they are more likely to accede to a reasonable settlement of the claims, knowing that the aggrieved party is also in possession of this evidence.
Our Courts are very concerned that the provisions of PAIA not be used in circumstances where it is more appropriate to utilise the court procedures which have been in existence far longer. Our Courts do not allow what is termed as “a fishing expedition”.
The applicant would have to show that the records requested are required because they will afford the applicant with a substantial advantage or that there is an element of need. The fact that the records can be obtained from another source may be raised to substantiate a refusal by a private body. It would be helpful, in order to meet this requirement to show, for example, that the documents are necessary in order for the applicant to identify the correct Defendant and/or in order to properly formulate its claim.
When an aggrieved party contemplates proceedings aimed at the enforcement of its rights it would be well advised to first consider whether the mechanism provided for in PAIA can and ought to be employed before launching into formal court proceedings.
ENS - Edward Nathan Sonnenbergs
Janine Lee
South Africa
November 2 2010
Source: Lexology
In the past the aggrieved party would institute action and would subsequently seek access to these documents, recordings or data in the course of the discovery procedures provided for in the court rules. This may mean that the true grounds of the action for recovery are only revealed at a fairly late stage once the discovered documents, recordings or data have been considered. Amendments to the pleadings (resulting in additional costs) may be necessary. At worst the discovery process may make it clear that the wrong party has been sued, and that the aggrieved party ought to have looked elsewhere to make good its loss.
These documents, recordings or data are only available once litigation is at an advanced stage. They may expose solid grounds for liability on the part of the Defendant. Had access to these documents, recordings or data been available at the outset, there would have been a strong incentive for the Defendant to settle the claim without compounding the harm by forcing the aggrieved party to embark on an expensive and time consuming process of enforcing its rights.
In the words of Cameron JA in his dissenting judgement in UNITAS HOSPITAL v VAN WYK AND ANOTHER 2006 (4) SA 436 (SCA) “Litigation involves massive costs, time, personnel, effort and risks. Where access to a document can assist in avoiding the initiation of litigation, or opposition to it, the objects of the statute suggest that access should be granted.”
The statute to which Cameron JA refers is the Promotion of Access to Information Act 2 of 2000 (PAIA). This Act is aimed at giving effect to every person’s right to access to information expressed in Section 32 of the Constitution. Section 32 of the Constitution provides:
Everyone has the right of access to:
(a) any information held by the State; and
(b) any information that is held by another person and that is required for the exercise or protection of any rights.
An aggrieved party can therefore utilise the mechanism provided for in PAIA with a view to accessing documents, computer files, tape or video recordings, email messages and the like.
A decision regarding whether to employ the procedure embodied in PAIA must be made at an early stage of any dispute resolution process. Once legal proceedings (in the form of an action or application launched in a court of law) have commenced, the parties to that legal process are restricted to utilising the applicable court procedures and cannot then seek to apply for access in terms of PAIA.
An application for access to information under PAIA can be directed either at a public body such as a government department or a state owned enterprise, or at a private body such as a natural person or commercial corporate entity. The requirements to be met by an applicant when applying for access to information in the hands of a private body are more onerous, since in addition to meeting the requirements of an application directed at a public body, the applicant must show that the record in question is required for the exercise or protection of a right. The applicant need not disclose the reason for its request, where this is directed at a public body.
There are certain limited grounds on which either a public body or a private body may legitimately refuse to give access, and these include that access would involve unreasonable disclosure of personal information about a third party, or if the record in question contains trade secrets of a third party or information supplied in confidence by a third party which could reasonable be expected to put that third party at a disadvantage in contractual negotiations or commercial competition. Other grounds relate to the endangerment of the life or physical safety of individuals or of security of buildings, transport systems or other property. An obvious exception is a record which is privileged in legal proceedings since one cannot access records under PAIA which would protected from discovery in terms of the normal rules applicable in legal proceedings.
The obvious advantage of the PAIA process is that the aggrieved party will obtain the documentation much sooner. This fact has a number of important implications.
Very often documents, recordings or computer data are lost or destroyed over time. Obtaining copies at an early stage will avoid any prejudice arising from this type of incompetence. If the aggrieved party obtains all relevant records at an early stage it will be better placed, at the outset, to assess the prospects of success of litigation and to focus on the areas most likely to found a solid case at the trial, thus saving time and money. The lawyers representing the aggrieved party in any legal processes which may follow will be armed with the appropriate knowledge required for accurate pleading of the case, meaning that it should not be necessary to make amendments to the pleadings at a later stage, again saving time and money. The prospective Defendant will be in a position, at an early stage, to more accurately assess their prospects of successfully defeating the claim. If the evidence is such that they must accept that there is a high probability of a court finding against them, they are more likely to accede to a reasonable settlement of the claims, knowing that the aggrieved party is also in possession of this evidence.
Our Courts are very concerned that the provisions of PAIA not be used in circumstances where it is more appropriate to utilise the court procedures which have been in existence far longer. Our Courts do not allow what is termed as “a fishing expedition”.
The applicant would have to show that the records requested are required because they will afford the applicant with a substantial advantage or that there is an element of need. The fact that the records can be obtained from another source may be raised to substantiate a refusal by a private body. It would be helpful, in order to meet this requirement to show, for example, that the documents are necessary in order for the applicant to identify the correct Defendant and/or in order to properly formulate its claim.
When an aggrieved party contemplates proceedings aimed at the enforcement of its rights it would be well advised to first consider whether the mechanism provided for in PAIA can and ought to be employed before launching into formal court proceedings.
Janine Lee
South Africa
November 2 2010
Source: Lexology
Thursday, September 9, 2010
An audience with the GRI's Mervyn King
Interview with the author of South Africa’s King reports, chair of the GRI and Nelson Mandela’s favorite judge
In 1992, as South Africa was embarking on the path to real democracy, the private sector saw that it, too, needed a new system of governance. Mervyn King, a veteran corporate lawyer and a former Supreme Court judge (he resigned after a row with then prime minister PW Botha in 1980), was tapped for the job.
King was chairman of the Frame Group, a textile giant, and executive chairman of First National Bank’s corporate and investment banking group, as well as being involved in a range of charitable endeavors.
‘I’m too busy,’ he demurred – but then the phone rang and he heard Nelson Mandela’s gruff voice: ‘How’s my favorite judge?’ That was when King knew he would help remake South Africa’s corporate governance. He formed what duly became the King Committee, authoring the King I report (1994), King II (2002) and King III (2009).
Earlier this year, as chairman of the Global Reporting Initiative (GRI), King visited New York, where he sat down with IR magazine’s Neil Stewart.
I remember landing in South Africa on April 27, 2004 and hearing on the radio the celebrations of ten years of democracy. Your country had become an example to the world. As for corporate governance, this small economy was punching way above its weight. How did South Africa go from pariah to a model of best practice?
I formed the King Committee just when the majority of our citizens needed guidance on how to operate in the economy because they’d never been in the economy. We couldn’t just cookie-cut what the UK or America had done. Instead we developed an inclusive approach to governance, taking account of the legitimate interests and expectations of the stakeholders in the decision-making process. That was the basis of King I in 1994, and the concept went around the world like wildfire.
Since then the corporate world has joined the sustainability movement, and so have you. Is Mervyn King the personification of the convergence of environmental, social and governance factors?
Going back to the Earth Summit in Rio de Janeiro in 1992, we realized the planet was going into crisis. The penny dropped and I suddenly saw that corporations had a huge role to play in making life on earth sustainable. I became passionate about it, and by 2002, when the Earth Summit took place in Johannesburg, we knew we had to rewrite the King Code. However, we made a mistake: we wrote a separate chapter on sustainability reporting and in consequence, companies started reporting on sustainability in a silo, rather than integrating it.
In King III, we corrected that mistake. I directed my committee on the basis that the cornerstone has got to be that governance, strategy and sustainability are inseparable; companies have to integrate them into the very fabric, the very rhythm or DNA of their business.
Did the financial crisis set back or advance the sustainability movement?
The financial crisis absolutely brought sustainability forward. It reinforced the idea that corporations are the greatest pool of human and monetary capital, and when a corporation fails, there’s a huge impact on society. On the other side of the coin, when you have a great corporate success, it impacts positively on society.
Look at the Coca-Cola Company, which operates in more than 150 countries. Around 10 years ago, when it opened a new bottling plant in the Indian state of Kerala, the water ran dry and Kerala sued Coke. Back in the boardroom in Atlanta, Coke’s directors realized that water was a risk factor in their business. To their credit, they started a long-term strategic plan summarized by the three Rs: reuse, replenish and recycle water. Now Coke recycles millions of liters of water around the world. Not only does it show that Coke is a good corporate citizen, so we keep drinking the product because of the company’s brand and reputation, but it also shows Warren Buffett and other investors that Coke has a long-term, sustainable business.
For hundreds of years, we had a ‘take, make and waste’ economy based on two false assumptions: that the planet has infinite resources, and that it has an infinite capacity to absorb waste. Wrong!
Another example: Procter & Gamble. There are 800 mn to 900 mn babies in the world, each using six to eight disposable diapers a day. Diapers covered in a chemical that’s toxic to water are going into landfills. So P&G – whose tagline is that they touch the lives of people around the world, 3 bn times a day – is spending millions on R&D to make a disposable diaper with less harmful chemicals. If that moves to the biodegradable disposable diaper, they’ll knock their competitors right out of the market.
What are investors doing to help shoulder these responsibilities?
Capital markets today are electronic and borderless. With the click of a mouse capital flows in, or it flows out. Institutional investors can make or destroy a market. Today major shareholders have more obligations than rights. A pension fund has to think about its beneficiaries and its responsibility to them when they retire in 25 or 30 years. They have to look at every company they invest in and ask, ‘Is this business sustainable?’
It’s a whole new way of thinking. Around the world, stewardship codes are being developed to guide the way financial institutions should act. Look at the UK, where stewardship is being incorporated into the Combined Code, or South Africa, which has just finalized the latest draft of a responsible investing code.
Can South Africa teach the rest of the world a lesson in corporate citizenship?
I’ll say this not as chairman of the King Committee, but rather repeating the words of Adrian Cadbury: King III is at the forefront of governance. In fact, King III is being referred to in reformulating the Combined Code in the UK.
South Africa may have a current account deficit, but capital keeps flowing into the country. Every working day the JSE securities exchange does about $2.5 bn in equity trades. A large part of that is foreign institutional money coming in. Why? CalPERS, Hermes, Templeton – they all say they invest in South African firms because they regard our listed companies as among the best governed in the world. And they are.
One last thing I have to know: how did you come to be Mandela’s favorite judge?
I think he used that phrase as a motivational tool! In the late 50s and early 60s, when I was a clerk and a young attorney, Mandela and Oliver Tambo practiced as attorneys in a little building opposite our lower court in Johannesburg. In the courts in those days, whites and blacks were separated by a divider. We were ‘learned friends’, but as a young white attorney, I could not have practiced in the same place as Mandela. This wicked absurdity amused him.
Later, after Mandela went to jail, I became chairman of Operation Hunger. The foreign press was reporting on what was happening because of apartheid in the urban areas, but the real suffering was in the rural areas, where children were starving. Through a businessmen’s ‘executive club’, we raised R10 mn ($1.4 mn) a year and fed 2.5 mn children every day for years. Mandela’s daughter Zindzi worked with me in Operation Hunger, so he knew of our work through his family. To this day we have a great relationship.
Over the last several months King has addressed the European parliament on the possibility of one set of integrated reporting across Europe; he is also one of the World Bank’s private sector advisers on corporate governance and chairman of the committee reviewing the UN’s governance after the food for oil scandal. He is the author of Transient Caretakers (with Teodorina Lessidrenska) and The Corporate Citizen.
Source: IR Magazine
In 1992, as South Africa was embarking on the path to real democracy, the private sector saw that it, too, needed a new system of governance. Mervyn King, a veteran corporate lawyer and a former Supreme Court judge (he resigned after a row with then prime minister PW Botha in 1980), was tapped for the job.
King was chairman of the Frame Group, a textile giant, and executive chairman of First National Bank’s corporate and investment banking group, as well as being involved in a range of charitable endeavors.
‘I’m too busy,’ he demurred – but then the phone rang and he heard Nelson Mandela’s gruff voice: ‘How’s my favorite judge?’ That was when King knew he would help remake South Africa’s corporate governance. He formed what duly became the King Committee, authoring the King I report (1994), King II (2002) and King III (2009).
Earlier this year, as chairman of the Global Reporting Initiative (GRI), King visited New York, where he sat down with IR magazine’s Neil Stewart.
I remember landing in South Africa on April 27, 2004 and hearing on the radio the celebrations of ten years of democracy. Your country had become an example to the world. As for corporate governance, this small economy was punching way above its weight. How did South Africa go from pariah to a model of best practice?
I formed the King Committee just when the majority of our citizens needed guidance on how to operate in the economy because they’d never been in the economy. We couldn’t just cookie-cut what the UK or America had done. Instead we developed an inclusive approach to governance, taking account of the legitimate interests and expectations of the stakeholders in the decision-making process. That was the basis of King I in 1994, and the concept went around the world like wildfire.
Since then the corporate world has joined the sustainability movement, and so have you. Is Mervyn King the personification of the convergence of environmental, social and governance factors?
Going back to the Earth Summit in Rio de Janeiro in 1992, we realized the planet was going into crisis. The penny dropped and I suddenly saw that corporations had a huge role to play in making life on earth sustainable. I became passionate about it, and by 2002, when the Earth Summit took place in Johannesburg, we knew we had to rewrite the King Code. However, we made a mistake: we wrote a separate chapter on sustainability reporting and in consequence, companies started reporting on sustainability in a silo, rather than integrating it.
In King III, we corrected that mistake. I directed my committee on the basis that the cornerstone has got to be that governance, strategy and sustainability are inseparable; companies have to integrate them into the very fabric, the very rhythm or DNA of their business.
Did the financial crisis set back or advance the sustainability movement?
The financial crisis absolutely brought sustainability forward. It reinforced the idea that corporations are the greatest pool of human and monetary capital, and when a corporation fails, there’s a huge impact on society. On the other side of the coin, when you have a great corporate success, it impacts positively on society.
Look at the Coca-Cola Company, which operates in more than 150 countries. Around 10 years ago, when it opened a new bottling plant in the Indian state of Kerala, the water ran dry and Kerala sued Coke. Back in the boardroom in Atlanta, Coke’s directors realized that water was a risk factor in their business. To their credit, they started a long-term strategic plan summarized by the three Rs: reuse, replenish and recycle water. Now Coke recycles millions of liters of water around the world. Not only does it show that Coke is a good corporate citizen, so we keep drinking the product because of the company’s brand and reputation, but it also shows Warren Buffett and other investors that Coke has a long-term, sustainable business.
For hundreds of years, we had a ‘take, make and waste’ economy based on two false assumptions: that the planet has infinite resources, and that it has an infinite capacity to absorb waste. Wrong!
Another example: Procter & Gamble. There are 800 mn to 900 mn babies in the world, each using six to eight disposable diapers a day. Diapers covered in a chemical that’s toxic to water are going into landfills. So P&G – whose tagline is that they touch the lives of people around the world, 3 bn times a day – is spending millions on R&D to make a disposable diaper with less harmful chemicals. If that moves to the biodegradable disposable diaper, they’ll knock their competitors right out of the market.
What are investors doing to help shoulder these responsibilities?
Capital markets today are electronic and borderless. With the click of a mouse capital flows in, or it flows out. Institutional investors can make or destroy a market. Today major shareholders have more obligations than rights. A pension fund has to think about its beneficiaries and its responsibility to them when they retire in 25 or 30 years. They have to look at every company they invest in and ask, ‘Is this business sustainable?’
It’s a whole new way of thinking. Around the world, stewardship codes are being developed to guide the way financial institutions should act. Look at the UK, where stewardship is being incorporated into the Combined Code, or South Africa, which has just finalized the latest draft of a responsible investing code.
Can South Africa teach the rest of the world a lesson in corporate citizenship?
I’ll say this not as chairman of the King Committee, but rather repeating the words of Adrian Cadbury: King III is at the forefront of governance. In fact, King III is being referred to in reformulating the Combined Code in the UK.
South Africa may have a current account deficit, but capital keeps flowing into the country. Every working day the JSE securities exchange does about $2.5 bn in equity trades. A large part of that is foreign institutional money coming in. Why? CalPERS, Hermes, Templeton – they all say they invest in South African firms because they regard our listed companies as among the best governed in the world. And they are.
One last thing I have to know: how did you come to be Mandela’s favorite judge?
I think he used that phrase as a motivational tool! In the late 50s and early 60s, when I was a clerk and a young attorney, Mandela and Oliver Tambo practiced as attorneys in a little building opposite our lower court in Johannesburg. In the courts in those days, whites and blacks were separated by a divider. We were ‘learned friends’, but as a young white attorney, I could not have practiced in the same place as Mandela. This wicked absurdity amused him.
Later, after Mandela went to jail, I became chairman of Operation Hunger. The foreign press was reporting on what was happening because of apartheid in the urban areas, but the real suffering was in the rural areas, where children were starving. Through a businessmen’s ‘executive club’, we raised R10 mn ($1.4 mn) a year and fed 2.5 mn children every day for years. Mandela’s daughter Zindzi worked with me in Operation Hunger, so he knew of our work through his family. To this day we have a great relationship.
Over the last several months King has addressed the European parliament on the possibility of one set of integrated reporting across Europe; he is also one of the World Bank’s private sector advisers on corporate governance and chairman of the committee reviewing the UN’s governance after the food for oil scandal. He is the author of Transient Caretakers (with Teodorina Lessidrenska) and The Corporate Citizen.
Source: IR Magazine
Saturday, June 27, 2009
Behind Ramatlhodi's front
Ngoako Ramatlhodi's secret Bushveld farm really was his, but his friend who fronted for him bankrolled it too -- before sharing in casino rights awarded by the Limpopo government, where Ramatlhodi was premier. Ramatlhodi, now chairperson of Parliament's justice committee, is tipped for the position of national director of public prosecutions.
The Mail & Guardian earlier this month revealed Ramatlhodi's hush-hush role in the 1996 purchase of a farm near Mokopane, while he was premier. It was sold two-and-a-half years later to Anglo Platinum for the controversial resettlement of communities, at a face-value profit of R1-million.
Ramatlhodi's role was obscured by the fact that the buyer was a close corporation owned on paper by his friend, Limpopo businessperson Joe Mogodi. Ramatlhodi volunteered that he was the true owner during a long-running Scorpions probe, since closed, into allegations that he took bribes from a social grants contractor. Mogodi, however, insisted to the M&G that he was the owner.
The records of an October 2000 North Gauteng High Court hearing, in which First National Bank sued Ramatlhodi for debt, reveal:
* FNB, which extended the loan to purchase the farm, knew Ramatlhodi was the true owner;
* In correspondence with the bank Mogodi confirmed he was merely Ramatlhodi's "go-between";
* Ramatlhodi's salary as premier was insufficient to meet FNB's instalments; and
* Mogodi paid hundreds of thousands of rands to cover the instalments and settle debt, leaving him in a "financial predicament".
Mogodi, in other words, bent over backwards to fund the purchase of the farm for Ramatlhodi. During this time Mogodi vied for a casino licence, which was ultimately awarded to a consortium including him. Completing the circle, the provincial gambling board that awarded the licence was headed by Seth Nthai -- Ramatlhodi's personal advocate who defended him against the FNB debt claim. From the facts of that dispute, Nthai would have known that Mogodi had bankrolled the farm for the premier. Mogodi declined to comment. Ramatlhodi and Nthai failed to comment by the time of going to press.
Ngoako Properties, the close corporation owned on paper by Mogodi, offered R2.2-million to buy Sterkwater-De Hoogedoorns farm, plus a further R600 000 for cattle and implements, in January 1996. The offer was accepted. FNB approved a five-year loan of R2.8-million to fund the purchase. Both Mogodi and Ramatlhodi signed surety. But Mogodi may not have been fully aware of what he had let himself in for. The record of the FNB-Ramatlhodi hearing reflects FNB's Polokwane bank manager, Hendrik Janse van Rensburg, writing to his regional head office in April 1996: "We enclose the premier's balance sheet and we confirm that he signed the letter of suretyship … Repayment of the loan was discussed with him and he referred us to Mr Mogodi."
Three years later, once things had gone belly-up, Van Rensburg reported to his regional office: "During March 1996 the premier approached the bank for a 100% long-term loan of R2.8-million … The bank approved the loan subject to the condition that the term of the loan be reduced to five years ... "The premier could not register the farm property in his name in view of his position as premier, and he requested his personal friend, Mr J Mogodi, to register the close corporation in his name … "[Regional office instructed us] to request Mr Mogodi to sign a letter of suretyship and register a bond over his [own] farm property. He reluctantly agreed, informing us as follows: he was not even present when the financing of the farm had been discussed … "Mr Mogodi has serviced the instalments from the loan account without any financial assistance from the premier. He was eventually forced to surrender his endowment policies and MIA [managed investment account] to continue with his trading activities."
From the start, Van Rensburg's reports show, Mogodi attempted to negotiate a lighter burden with FNB. The monthly instalments were R55 000 a month. By early 1997 Mogodi had, on Van Rensburg's evidence, already put in R300 000 of his own money, but the loan account was in arrears. An FNB agricultural adviser proposed selling off less viable portions of the farm, but Mogodi, according to another Van Rensburg report, informed them: "He [Ramatlhodi] has decided to keep the farm property." Mogodi also told the bank they could only afford to repay at a rate of R35 000 to R40 000 a month, consisting of R20 000 (Mogodi), R10 000 (Ramatlhodi) and R5 000 to R10 000 (farm income). That Ramatlhodi could never have intended to pay the entire loan from his salary is clear: as late as 2004, Ramatlhodi grossed less than R60 000 a month. His net salary would have been well below FNB's R55 000 instalments.
The loan account fell further into arrears. In September 1997 cattle and implements were auctioned. When Angloplat made an offer of R3.2-million for the farm property in September 1998 it was accepted. The profit went straight to FNB, but the loan account was so far in arrears that FNB demanded Mogodi and Ramatlhodi pay a shortfall of more than R1-million. Mogodi eventually paid R375 000 and FNB let him off, but it sued Ramatlhodi for the balance. After the first day of the trial, in October 2000, FNB and Ramatlhodi settled. The details are not known.
On the available evidence, Mogodi's R375 000 brought his total contribution towards Ramatlhodi's farm to at least R675 000, and potentially much more. Did he get anything in return? Although the full circumstances are not known, Mogodi soon benefited from a casino licence. This is made problematic by the timing of the award and the dual role of Nthai, Ramatlhodi's defence advocate in the FNB matter.
Source: Mail & Guardian
The Mail & Guardian earlier this month revealed Ramatlhodi's hush-hush role in the 1996 purchase of a farm near Mokopane, while he was premier. It was sold two-and-a-half years later to Anglo Platinum for the controversial resettlement of communities, at a face-value profit of R1-million.
Ramatlhodi's role was obscured by the fact that the buyer was a close corporation owned on paper by his friend, Limpopo businessperson Joe Mogodi. Ramatlhodi volunteered that he was the true owner during a long-running Scorpions probe, since closed, into allegations that he took bribes from a social grants contractor. Mogodi, however, insisted to the M&G that he was the owner.
The records of an October 2000 North Gauteng High Court hearing, in which First National Bank sued Ramatlhodi for debt, reveal:
* FNB, which extended the loan to purchase the farm, knew Ramatlhodi was the true owner;
* In correspondence with the bank Mogodi confirmed he was merely Ramatlhodi's "go-between";
* Ramatlhodi's salary as premier was insufficient to meet FNB's instalments; and
* Mogodi paid hundreds of thousands of rands to cover the instalments and settle debt, leaving him in a "financial predicament".
Mogodi, in other words, bent over backwards to fund the purchase of the farm for Ramatlhodi. During this time Mogodi vied for a casino licence, which was ultimately awarded to a consortium including him. Completing the circle, the provincial gambling board that awarded the licence was headed by Seth Nthai -- Ramatlhodi's personal advocate who defended him against the FNB debt claim. From the facts of that dispute, Nthai would have known that Mogodi had bankrolled the farm for the premier. Mogodi declined to comment. Ramatlhodi and Nthai failed to comment by the time of going to press.
Ngoako Properties, the close corporation owned on paper by Mogodi, offered R2.2-million to buy Sterkwater-De Hoogedoorns farm, plus a further R600 000 for cattle and implements, in January 1996. The offer was accepted. FNB approved a five-year loan of R2.8-million to fund the purchase. Both Mogodi and Ramatlhodi signed surety. But Mogodi may not have been fully aware of what he had let himself in for. The record of the FNB-Ramatlhodi hearing reflects FNB's Polokwane bank manager, Hendrik Janse van Rensburg, writing to his regional head office in April 1996: "We enclose the premier's balance sheet and we confirm that he signed the letter of suretyship … Repayment of the loan was discussed with him and he referred us to Mr Mogodi."
Three years later, once things had gone belly-up, Van Rensburg reported to his regional office: "During March 1996 the premier approached the bank for a 100% long-term loan of R2.8-million … The bank approved the loan subject to the condition that the term of the loan be reduced to five years ... "The premier could not register the farm property in his name in view of his position as premier, and he requested his personal friend, Mr J Mogodi, to register the close corporation in his name … "[Regional office instructed us] to request Mr Mogodi to sign a letter of suretyship and register a bond over his [own] farm property. He reluctantly agreed, informing us as follows: he was not even present when the financing of the farm had been discussed … "Mr Mogodi has serviced the instalments from the loan account without any financial assistance from the premier. He was eventually forced to surrender his endowment policies and MIA [managed investment account] to continue with his trading activities."
From the start, Van Rensburg's reports show, Mogodi attempted to negotiate a lighter burden with FNB. The monthly instalments were R55 000 a month. By early 1997 Mogodi had, on Van Rensburg's evidence, already put in R300 000 of his own money, but the loan account was in arrears. An FNB agricultural adviser proposed selling off less viable portions of the farm, but Mogodi, according to another Van Rensburg report, informed them: "He [Ramatlhodi] has decided to keep the farm property." Mogodi also told the bank they could only afford to repay at a rate of R35 000 to R40 000 a month, consisting of R20 000 (Mogodi), R10 000 (Ramatlhodi) and R5 000 to R10 000 (farm income). That Ramatlhodi could never have intended to pay the entire loan from his salary is clear: as late as 2004, Ramatlhodi grossed less than R60 000 a month. His net salary would have been well below FNB's R55 000 instalments.
The loan account fell further into arrears. In September 1997 cattle and implements were auctioned. When Angloplat made an offer of R3.2-million for the farm property in September 1998 it was accepted. The profit went straight to FNB, but the loan account was so far in arrears that FNB demanded Mogodi and Ramatlhodi pay a shortfall of more than R1-million. Mogodi eventually paid R375 000 and FNB let him off, but it sued Ramatlhodi for the balance. After the first day of the trial, in October 2000, FNB and Ramatlhodi settled. The details are not known.
On the available evidence, Mogodi's R375 000 brought his total contribution towards Ramatlhodi's farm to at least R675 000, and potentially much more. Did he get anything in return? Although the full circumstances are not known, Mogodi soon benefited from a casino licence. This is made problematic by the timing of the award and the dual role of Nthai, Ramatlhodi's defence advocate in the FNB matter.
Source: Mail & Guardian
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