African Bank Report Checking for Fraud to Be Public by Year End

An investigation into whether fraud or reckless lending was responsible for the collapse of African Bank Investments Ltd. in August 2014 will be published by the South African Reserve Bank by year end.

The Registrar of Banks has consulted with the Minister of Finance and decided to release the report once a new lender built out of African Bank’s viable assets is established, Hlengani Mathebula, a spokesman for the Pretoria-based central bank, said in an e-mailed response to questions on Tuesday. “It is anticipated that this will occur before the end of the year,” he said.

African Bank failed as bad debts rose and funding dried up. After appointing an administrator to rescue some assets for a “good bank,” the central bank in September last year asked attorney John Myburgh to investigate whether or not management practices were questionable and if there was an intent to defraud investors. His report, which the SARB has described as “hefty,” was due to be delivered to the regulator seven months ago.

African Bank, which provides unsecured loans to low-income earners, said on Aug. 27 it had received the necessary approvals to establish the good bank and was waiting for a credit provider license from the National Credit Regulator.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE