The battle between Public Protector Advocate Busisiwe Mkhwebane and one of South Africa’s biggest banks, Absa, is set to begin on Tuesday morning in the Pretoria High Court.
Absa, as well as the South African Reserve Bank and the National Treasury, want the court to overturn recommendations the Public Protector made in her findings into the bailout Absa received during the apartheid era.
Former Public Protector Thuli Madonsela had initially announced in 2011 that she would be investigating the bailout.
According to records, the Reserve Bank gave “lifeboat” loans to apartheid-era bank Bankorp from 1985 to 1992. From 1992, Bankorp became part of Absa, with the bank continuing to receive assistance from the Reserve Bank until 1995.
A British asset-recovery firm, CIEX, run by former British intelligence agent Michael Oatley, offered to investigate apartheid graft for the new government in 1997. The company discovered that billions had been laundered by arms dealers and apartheid-era bankers and politicians.
The trail had seemingly hit a dead-end until Madonsela announced that she would be investigating, but her term ended before the report could be finalised.
Her successor finalised the report in June this year and found that the Reserve Bank had acted improperly. She recommended that the Special Investigating Unit recover more than R1-billion from Absa. She additionally also instructed Parliament to change the Reserve Bank’s mandate.
Her recommendations were challenged and in August, the North Gauteng High Court set aside her instruction to Parliament.
Mkwebane’s lawyers are expected to argue that her findings are legally binding and that Absa must pay back the R1-billion.