Editorial

Dear Reader: Banks: Where does the buck stop?


We were the first to disclose dishonest bookkeeping by the FirstRand banking group, when, three years ago, noseweek unpacked the fraudulent goings-on at their offshore subsidiary, Ansbachers. Besides the ill-devised and illegal offshore “structures” they were selling their clients, and the money laundering on behalf of the likes of Discovery’s directors or the channellers of arms-deal bribes, it was the shady, bottom-drawer bookkeeping that really shook us – to the point where we posed the question: Are you running a whorehouse or a bank?

Even faced with the evidence, many did not believe us. Our own chairman, the kindly Dr Van Zyl Slabbert resigned from the noseweek board in scandalised disbelief. Those who did believe us did not appear to care very much.

Since then the international banking crisis has broken, triggering a world depression that has seen millions out of their jobs and many more millions starving and ready to riot. All triggered by the greed and shady dealings of the world’s biggest banks.

That is apparently what it takes to make people think the unthinkable. Now, suddenly, no-one trusts the banks and everyone cares a lot.

Mr and Mrs Average were deeply shocked by last month’s Carte Blanche disclosures about how FNB has persisted with the fraudulent bookkeeping that has seen tens of thousands of erstwhile Saambou home loan clients robbed of their homes and life savings (first revealed in noses40&41 – in 2002). Now, it seems, FirstRand may finally have gone beyond what public opinion will tolerate.

But how much more is it going to take to make our bankers stop? The raving intervention of a Julius Malema? Because if that’s what it takes, that’s what they – and we – are going to get.

As we went to press there was a story doing the rounds that, having bought the bond originator Bond Choice from Nedbank, and having then established an entity called Findex, ABSA has told estate agents that, in effect, anyone wanting an ABSA bond will have to go through Findex/Bond Choice. (ABSA will allow no other bond originator more than a 40% bond – the vast majority of home buyers need a loan of 80% or more of the purchase price.)

Also part of the scheme: ABSA intend to force all estate agents who apply for ABSA bonds on behalf of their clients to sign some sort of preferential or exclusive use contract with Findex/Bond Choice. Anything to squeeze another fee from customers.

ABSA is by far the biggest player in the home loans market and this amounts to a clear abuse of power in the marketplace. Surely this raises a whole lot of ethical issues and calls for the attention of the competition board? In any event, some of the big players in the estate agency business are not pleased and are likely to find rare common cause on this one. So it’s early days yet, even if ABSA’s plan comes into force on 1 December.

ABSA clients should not be surprised – they need only recall how their new chairman, the deceptively petite Ms Ramos, was unmoved at seeing Transnet’s pensioners in the gutter in order to up her annual bonus by a couple of million.

Enough of banks and on to Woolies. News reports of some suspect offshore dealings involving Woolworths’ directors (its departing chief executive and his about-to-be successor) and the company’s Australian subsidiary, Country Road, have featured in the Australian press over the past month but, curiously, not in the South African business press. (Except, it must be said, on Moneyweb’s online service – where the average Woolworths cusomer is unlikely to see it.) Go to www.businessspectator.com.au and search for “country+road”. Interesting.

Finally, it’s the festive season, a time of giving and community. We wish you much happiness. And, yes, be generous (but not foolish) in your giving – especially to those in need. What better than to spread around a bit of happiness!

The Editor

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