CAPE TOWN — This is one the ANC simply cannot wriggle out of. Two sets of its top leadership brass tried to persuade banks not to close down the Guptas accounts. It’s a matter of public record at the Zondo State Capture Commission of Inquiry, no matter how sophisticated the ANC’s post-facto explanations now are. Here Ferial Haffajee, whose journalistic integrity has been affirmed and enhanced by events during and after the Zuma years of misrule, takes a wry look at what this means for the party’s stewardship of society and the very rules that its initial financial stewards originally put in place to ensure the integrity of SA’s banking sector. Rules that ironically have now led to the banks standing up to government and the corrupt clients that once formed a clandestine part of it. As Haffajee so aptly puts it, there was special pleading for a crony family by the ANC, ironically, among others to Maria Ramos, the very person whom the new rulers sent on a world tour to establish best global banking practice. How the party has changed… This story courtesy of the Daily Maverick. – Chris Bateman
By Ferial Haffajee
Viewed through the lens of the Zondo Commission of Inquiry into State Capture, the ANC looks weathered and divided, a shadow of the political party whose leaders helped modernise South Africa’s banking and financial system.
Testimony by the banks this week reveals an evisceration and a step away from the ANC’s identify as a party of the rule of law.
While the head of the party’s economic transformation committee, Enoch Godongwana, is an affable and friendly man, evidence on Tuesday by former Rand Merchant Bank CEO Johan Burger that he had been asked or summonsed to a meeting by the official by text message begs the question: how seriously does the party take its history and role as a steward of society?
There is something insouciant and casually careless about Godongwana messaging Burger to set up a meeting to inquire why the bank had been one of four which revoked bank accounts of the Gupta family and related entities.
Godongwana has good relationships with many business leaders and probably has many of the Top 100 company CEOs on speed dial, but the decision to intervene in the banks’ decision to close Gupta accounts is a serious one. Was it fitting of a governing party and one with as long a history as the ANC to arrange that meeting at all and then to do so by text message?
As several banking executives said at the commission this week, the ANC’s decision to step in was a step-change in banking regulation and a highly risky one. The party summonsed banking executives to Luthuli House while former Mineral Resources minister Mosebenzi Zwane used an inter-ministerial committee purportedly created by Cabinet to pressurise the banks too.
“In my 32 years in banking, I’ve not had a third party questioning client/banker relationships,” Burger told Zondo.
Big, bad ANC vs the “good guy” banks? It’s a little more complex than that. The FIC-flagged suspicious #Gupta transactions started showing up in 2012. Why did the banks wait until 2016 – after the Mentor and Jonas revelations – to close the family’s accounts? #Standardbank #Zondo
— Pieter-Louis Myburgh (@PLMyburgh) September 17, 2018
Burger was the only one of the four big bank CEOs who did not attend either the meeting with the ANC or another meeting with Zwane’s inter-ministerial committee to also probe why the banks had closed the accounts.
This means the banks were subjected to two levels of pressure by the ANC on behalf of a single family shown to be close to former president Jacob Zuma.
At a Business Leadership SA meeting in 2016, then ANC secretary-general Gwede Mantashe met ABSA CEO Maria Ramos and asked her to a meeting to discuss the bank account closures.
A day later, she attended the meeting at Luthuli House, where she warned Mantashe that “it will be a very short meeting” if anything related to client confidentiality was to be discussed.
But the very fact of summonsing Ramos in what was really a case of special pleading for a crony family tells a story. Ramos is a former ANC official and a symbol of what the party did right in its early years as government. She was the Treasury’s first Director General drawn from the liberation movement.
— Jacques Cupido (@jacquescupido12) September 12, 2018
The ANC sent a cadre of activists like Ramos around the world to learn how to run the Treasury and the Reserve Bank and to help reintegrate the apartheid-isolated South Africa back into the global financial system. They benchmarked the country to meet international norms and best practices.
South Africa became part of the inter-governmental Financial Action Task Force (FATF) run out of the OECD. This led to the passage of the country’s financial intelligence laws and to the establishment of the Financial Intelligence Centre.
These laws prevent international crime and money laundering and provide the kind of X-ray vision that ultimately ensured that the Gupta family’s various efforts to launder and corrupt were exposed.
The creation of the modern banking system can be credited to a new democratic government led by the ANC, but this week’s evidence before the Zondo Commission showed how the party’s actions put this legacy of creating a modern financial system at risk.
It’s amazing how much public space is given for political leaders facing corruption charges to mislead our people to believe that it’s ok for today’s political leaders to loot public funds because apartheid administrations oppressed and stole from the people #StateCapture
— Prof Thuli Madonsela (@ThuliMadonsela3) September 12, 2018
“Non-compliance (with global banking regulations) can lead to the revocation of a (banking) licence and personal criminal liability… there was evidence of large unexplained transfers of funds between Oakbay and related parties at other banks,” Yasmin Masithela, ABSA’s head of strategy, told the Zondo Commission of Inquiry.
ANC officials say the party was not interfering or pressuring the banks when it called them to Luthuli House. They said that the party regularly meets with business leaders, either at the request of these captains of industry or by asking for meetings with them.
One official at Luthuli House said it called the banks to find out how the system of banking politically exposed persons (PEP) worked – banks deal with this category of people as higher risk clients. The Gupta family were classified as PEPs.
The officials said that Luthuli House under Mantashe had, in fact, acted as a bulwark against the growing influence of the Guptas. Mantashe spoke out when the Guptas landed a private plane of wedding-goers at Waterkloof in 2013.
In an interview with Daily Maverick on Monday, Mantashe said he believed the ANC’s intentions had been misread by Standard Bank when its executives were summonsed to a meeting at Luthuli House on 21 April 2016. DM