Absa has today filed a supplementary affidavit to the High Court in its case to have certain findings and remedial actions of the Public Protector’s Report reviewed and set aside.  The report dealt with the financial assistance provided by the South African Reserve Bank (SARB) to Bankorp, which Absa later bought.

In an affidavit filed on 13 July 2017, our initial grounds for challenging the Public Protector’s Report were that:

  1. The findings and remedial action were based on material errors of fact, including that Absa benefited from SARB financial support and that the SARB assistance did not benefit the general public.  There is no debt owed by Absa.   Absa paid fair value when it bought Bankorp.
  2. The Public Protector’s process was procedurally flawed and unfair to Absa.
  3. The debt alleged to be due had prescribed and was therefore not recoverable.
  4. The Public Protector had no jurisdiction to investigate the matter.

The supplementary affidavit, filed today, follows the application of rule 53(1) of the Uniform Rules of Court, which requires the Public Protector to provide us with a complete record of ALL the documents relating to the findings made by her in the final report.  

To date, the Public Protector failed to furnish us with the complete record - there are many critical documents which are still outstanding, many of which the Public Protector says she has not had sight of.

In our supplementary affidavit we argue the record shows that there are further grounds for the review and setting aside of the Public Protector’s Report. These include that:

  1. The record contains documentation which substantiates and confirms the fact that Absa did not benefit from the financial assistance provided to Bankorp but in fact, suffered a loss from its acquisition of Bankorp.  This includes the interview between the previous Public Protector and Judge Dennis Davis, who headed up a panel that investigated the assistance. 
  2.  The documents that are missing in the record show that the Public Protector did not have critical evidence in her possession and that she made findings without having regard to materially relevant information that may have had an impact on her decision
  3. Shortly before releasing the final report, the Public Protector had meetings with the Presidency's legal advisors, the State Security Agency and an unidentified economist regarding the remedial action against Absa, but failed to afford Absa a similar opportunity to discuss her proposed remedial actions - despite our express requests.

Overall, our position is that the Public Protector’s investigation was conducted in a grossly incompetent and fundamentally unfair manner, and had material factual and inaccurate errors.

Record supports Absa’s position

There are documents in the record which substantiate and confirm the fact that Absa did not benefit from the financial assistance to Bankorp but in fact suffered a loss from its acquisition of Bankorp, regardless of the financial assistance.

It appears that the Public Protector did not give any consideration to the agreement of sale between Absa and Sanlam in respect of the sale of Bankorp, and in particular that the price Absa paid took into account the financial assistance, as the Davis Panel found. The result is that the Public Protector’s finding that Absa should repay R1.125 billion lacks a proper factual or analytical basis, and is unsustainable in law.

Key evidence missing

In the record provided, there are several draft reports that were prepared by both the former and current Public Protectors.  In two of these draft reports, which appear to have been authored by

former Public Protector Ms. Thuli Madonsela, the remedial action proposed by Ms. Madonsela varied radically from that ultimately demanded by the Public Protector in her final report.

In one of the documents, Ms. Madonsela concluded, it would not "be lawful, reasonable or fair to recover as prescription and dictates of fairness to current ABSA investors militate against any action to recover."

The fact that the current Public Protector came to a different conclusion is significant. A letter from the Public Protector’s attorney on 11 September 2017 showed Ms Busisiwe Mkhwebane was not in possession of, nor did she have knowledge of, a wide range of documents containing materially relevant information.

This includes transcripts of Ms Madonsela's interviews with Mr. Michael Oatley of Ciex (the true complainant in the case) and Mr Billy Masetlha of the South Africa Secret Service, who were signatories to the Ciex contract. These interviews were fundamentally important, given the fact that the central focus of the investigation and final report was whether the government had implemented the Ciex "recommendations".

It is, therefore, not clear on what basis Ms Mkwhebane chose to ignore Ms Madonsela's conclusions.

Meeting with Presidency in June 2017

The record also contained a handwritten note of a meeting the Public Protector held with the Presidency’s legal advisors on 7 June 2017, days before publishing the final report. However, the record does not contain a transcript of the meeting.

It is evident from the Public Protector’s note of the meeting that the idea of ordering the Special Investigating Unit (SIU) to reinvestigate the “lifeboat” with the Presidency’s legal advisors was discussed. However, the Public Protector never alerted Absa to the prospect that she would incorporate the SIU in her remedial action. This was another material defect that violates Absa’s right to procedural fairness.

In addition, there is another handwritten note of a meeting between the Public Protector, the State Security Agency and an unidentified economist dated 6 June 2017. The note of the meeting records a discussion of the remedial action, including that SARB’s operations be "be aligned to social responsibility". This remedial action has since been set aside by the High Court.

There is also a discussion of what appears to be options for recovery of the money allegedly owing by Absa, including payment in instalments, or that the State should be given Absa shares as a form of repayment.

It is wholly unclear why and deeply disturbing that, the Public Protector was holding a meeting with the State Security Agency and an unidentified economist less than two weeks before she issued the Report, and apparently discussing the remedial action which she would impose against Absa.

Procedural unfairness

We maintain that the Public Protector violated Absa’s right to procedural fairness in the manner in which she imposed the remedial action. These rights have further been violated by meetings with the State Security Agency and the Presidency’s legal advisors.

In addition, the Public Protector continues to neglect to provide us with all the documents upon which the Public Protector relied to make her findings, both in the Provisional and Final Report. This continues to deny us the opportunity to properly appreciate and respond to the case it had to meet. This violates Absa’s basic right to procedural fairness.


We look forward to this case being brought to court. Because the business of the courts is conducted in the open, South Africans will get an opportunity to hear the facts and watch them being interrogated, so this matter can be put to rest.