The big South African banks have also been quiet when they should have been the first ones to raise the red flags when unusually big sums of money began to flow through their system, money that, in most cases, was being channelled from various state-owned entities, local municipalities and other public entities into private accounts of suspect companies and individuals, says Solly Moeng.
No self-respecting brand should ever want to be on the back foot, forced to defend itself in the courts of public opinion when it should be focusing its energy and resources delivering on shareholder and stakeholder value.
But a recent, painstakingly detailed report by amaBhungane on a seemingly toxic yet lucrative arrangement between Nedbank and disgraced Gupta-linked firm Regiments Capital, has left Nedbank in exactly that position.
The report suggests that Nedbank set aside the importance of managing its own reputation, leaving it in the hands of Regiments Capital, whose attention was, by all indications, only on inward money-flow. All else could wait for later.
Nedbank said that it had acted lawfully, Business Insider reported.
Given everything we now know about Regiments Capital, brand reputation did not seem to be ranked as a valuable commodity, when focus on this would have stood in the way of "introductions fees" or "commissions" flowing in from unsuspecting state-owned entities or metros, which may or may not have been represented by planted state capture enablers or other opportunists. During the decade-long state capture era, much public attention was focused on the movements of and activities directly linked to the Gupta family and former president Jacob Zuma, when Regiments Capital went about securing deals with the Airports Company of South Africa (ACSA), Transnet, the City of Johannesburg, the City of Tshwane, and others.
According to the report, Nedbank had several opportunities to either walk away from Regiments Capital or to insist on things being done according to the book. The bank insists in didn't suspect anything untoward.
Standard Bank seemed to have smelled the brewing trouble early in the game, but not before it paid a fee to Regiments Capital. However, it pulled out of the relationship. Meanwhile, while Absa insisted on things being done by the book, preferring to be the one that would write to Regiments Capital's clients to inform them about the "introduction fees" that would be paid by the bank to Regiments Capital – an arrangement that, clearly, the latter did not find convenient – Nedbank seemed satisfied to leave everything to Regiments Capital, believing its word that all the clients were aware of and happy with the fee arrangements. Regiments Capital included a one-liner at the bottom of its invoices to Nedbank to the effect that its clients had been informed about the fees.
Nedbank did, however, pull out of presenting its case at the Judicial Commission of Inquiry into State Capture.
South African banks, audit companies, and public trust
In recent years, I have used this space to comment about the role that the audit profession could have played to protect and enhance public interest when everyone else seemed determined, driven by greed, to throw it under the bus. A number of big audit companies and audit professionals have been found wanting after acting as enablers of massive criminality against the sovereign interests of a country that is still trying to move further away from a painful past into a more caring future, where the weakest would be taken care of and the strongest and most able would work hard for the benefit of all.
To date, no one has been arrested, tried and convicted. The harshest punishment meted out to named implicated individuals has been to fire them and allow them to either quietly find alternative employment elsewhere or to continue enjoying the fruits of their crimes away from the glare of the media. The South African audit profession still owes answers to South Africans. Even when invited to do so, it has resisted calls to speak as one to disclose the whole truth to South Africans and to tell them:
- How it all happened;
- Which of its controls were weakened and repurposed;
- What measures would be put in place to ensure one of it ever happens again, and;
- What punishment, other than firing them, has been meted out to those implicated in criminal wrongdoing. If there are cases where criminal cases have been opened, what is the status of those cases?
The big South African banks have also been quiet when they should have been the first ones to raise the red flags when unusually big sums of money began to flow through their system; money that, in most cases, was being channelled from various state-owned entities, local municipalities and other public entities into private accounts of suspect companies and individuals.
If South Africa has been turned into a gangster state, this phenomenon stretches way beyond the Free State and other corridors of political power into the corridors of banks, audit firms, and consultancies run by shady characters armed with impressive academic credentials and absence of care about public interest, often enabled by their counterparts who are strategically deployed into influential positions in the public sector.
Will Nedbank return the fees it should not have earned in questionable arrangements with Regiments Capital? Will other banks do the same? To restore the confidence of South Africans in the institutions of their country, both public and private, will they be allowed to see justice being done?
The popular suspicion that white-collar crime in the private sector is allowed to get away with much, when public sector crime receives all the scrutiny, will not go away if justice is not seen to be done in the case of Nedbank and others who are suspected of having benefited from the theft of monies intended to deliver a better life for all the people of South Africa.
Views expressed are the author's own.