Terry Crawford-Browne says the SA bank has been milked by its British owners
A Call to President Jacob Zuma to Appoint Commission of Inquiry into the Barclays Bank Takeover in 2005 of Absa.
My first book Eye On The Money published in 2007 on page 13 records that ANC intelligence operatives in June 1999 informed me that "the arms deal was just the tip of the corruption iceberg that concerned oil deals, the taxi recapitalisation process, toll roads, drivers' licences, Cell C, the Coega development, diamond and drug smuggling, weapons trafficking and money laundering."
Archbishop Njongonkulu Ndungane called for a judicial commission of inquiry into the arms deal as early as August 1999. Patricia de Lille, then a member of Parliament and now mayor of Cape Town, also called for such an investigation in September 1999. As a former international banker, I informed both the British and South African governments as early as October 1999 that the Barclays Bank loan agreements for the BAE arms deal contracts would be fraudulent. I also repeatedly pleaded with the former Minister of Finance, Trevor Manuel not to sign those agreements.
Unable to refute the mountain of evidence of corruption on the arms deal, and in response to my application then before the Constitutional Court, President Jacob Zuma finally appointed the Seriti Judicial Commission of Inquiry in October 2011. Amongst the documents that I submitted to the Court were 160 pages of affidavits that detail how and why BAE paid bribes of £115 million (R1.5 billion) to secure its arms deal contracts, to whom the bribes were paid and to which bank accounts the bribes were credited.
The documents also reveal the complicity in money laundering of the British government as well as both international and South African banks. Corruption is so entrenched amongst British financial institutions that the City of London has famously been described as "the most corrupt square mile anywhere on the planet Earth."
I have made my submission to the Seriti Commission on June 13, 2012. As yet, I am not permitted to disseminate the contents to the media. This petition to President Zuma is made independently of that Seriti Commission submission. It is also made in response to the appeal by the current Minister of Finance, Pravin Gordhan on July 11, 2012, whilst addressing the SA Institute of Professional Accountants, for "honest citizens, civil servants and business to take a stand against corruption."
My second book, Eye On The Diamonds published in May 2012 is dedicated to Bheki Jacobs, who led that team of ANC whistleblowers but who died in 2008. His work also included investigation of systematic looting of the Public Investment Commission (PIC), and money laundering. This R1 trillion entity administers pension funds for public service employees, and is South Africa's largest financial institution. The Minister of Finance, ex officio, heads the organisation.
The former minister in 2001 blocked Nedbank's attempted takeover of Standard Bank for well-founded reasons that it was not in the interests of the people of South Africa to limit competition in the banking industry. Internationally, the frenzy of bank mergers about ten years ago led to the 2008/2009 financial crisis. The past wisdom of the "four-pillar" policy is now highlighted by lobbying that mega-banks are "too big to fail," and that South Africa's largest banking group Absa is now caught up in the Barclays Bank LIBOR scandal.
1. The Barclays Bank/Export Credit Guarantee Department (ECGD) loan agreements for the BAE arms deal contracts were signed in January 2000 by Trevor Manuel, as Minister of Finance for and on behalf of the Republic of South Africa. The agreements were signed for and on behalf of Barclays Bank by Gabriel Buck, and for and on behalf of Her Britannic Majesty's Secretary of State by Chris Leeds of the ECGD.
2. Both Barclays Bank and the ECGD have long been notorious amongst international bankers for casting "blind eyes" to corruption, numerous banking irregularities including money laundering, and in being prime instruments towards impoverishment of so-called "third world countries." Barclays Bank was also by far the largest foreign bank creditor when apartheid-era South Africa defaulted on its foreign loans in 1985.
3. It is evident from the documents in my possession that method of calculating LIBOR interest rates (para 1.7A and 1.7B, page 11) to fund the BAE arms deal contracts conforms to the malpractices publicly reported in the current Barclays Bank LIBOR scandal.
4. Manuel's legal counsel, Advocate Michael Kuper SC in 2003 before the Cape High Court confirmed the authenticity of the 255 pages of agreements in my possession. He also informed Judges Andre Blignaut and Dennis Davis that their covenant, representation and default clauses are "potentially catastrophic for South Africa." Those agreements, I submit, are ultra vires, and beyond the borrowing authorities of the Minister of Finance, set in both the erstwhile Exchequer Act and the current Public Finance Management Act (PFMA).
5. My submission to the Seriti Commission has requested investigation of charges against both the Minister and Ms Maria Ramos (who is now Mrs Trevor Manuel) of perjury in connection with the arms deal, and of money laundering against him (see Manuel's response here). Ms Ramos was then Director General of the Treasury, and under oath, affirmed that the "agreements he signed are self-standing loan agreements with binding force and not dependent on any other agreement entered into by government." This lie was exposed by the Barclays Bank loan agreements.
6. When Judges Blignaut and Davis in February 2003 awarded me discovery of the international offers negotiating team and financial working group papers for the arms deal, Manuel and Ramos refused to comply with the judgment. The court had previously rejected their arguments that it "was not in the national interest to reveal how the government conducts its international financial arrangements."
7. This is pertinent given enthusiastic approval by the Minister in 2005 when Barclays Bank took over Absa with a 55.5 percent shareholding. What threats did Barclays Bank make, given those "representation, covenant and default" clauses? The takeover was trumpeted as a massive vote of confidence in South Africa.
8. The reality is that Absa, to the detriment of the South African public, has been milked by Barclays. Although Absa's assets amount to only 4 percent of the total, Absa is reported to contribute 20% to total Barclays' group revenue. Surveys repeatedly find Absa to be the most expensive of South African banks. The former governor of the SA Reserve Bank noted as early as 2007 that he failed to see any benefits of Barclays' management at Absa.
9. It is also noteworthy that Minister Tokyo Sexwale, through Batho Bonke, is a major shareholder in Absa and is a former director. Clear conflicts of interest are evident. Ramos left the Treasury to become CEO of Transnet, and since 2009 has been CEO of Absa.
10. The current international scandal around interest rate manipulation by Barclays' and other irregularities, the fine of £290 million (R3.7 billion) on June 27, 2012, and the resignations of Bob Diamond and other senior executives, warrants a thorough investigation into "potentially catastrophic" implications of Barclays Bank's ownership of Absa.
11. An investigation should consider the implications of foreign control over South Africa's banking system (including what pressure was applied to the then Minister of Finance to approve the ill-considered takeover of Absa), the detrimental consequences of usurious interest rates and bank charges, currency volatility, stagnant economic growth, rising unemployment and impoverishment -- and appropriate remedial action.
Statement issued by Terry Crawford-Browne, July 16 2012
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