A joint parliamentary meeting on transformation of the financial sector heard calls for the purchasing of a black-owned or state-owned bank.
Ms Philisiwe Mthethwa from National Empowerment Fund (NEF) told a meeting of the Standing Committee on Finance and the Portfolio Committee on Trade and Industry yesterday (23 March 2017) that the options are to either buy an existing bank or to start one from scratch. One option, she said, is to become a 51% shareholder of Mercantile Bank. This would see the bank being 51%-owned by the black public and 49% owned by government. It would require an initial capital outlay of about R306m: R150m from government and R156m from the black public.
She told the meeting that Mercantile Bank is currently for sale by its parent company in Portugal. Ms Mthethwa said Mercantile Bank has existing infrastructure, information technology and systems, a banking licence, and an existing brand and assets. “This is low-hanging fruit that could be scaled up. It addresses the need of black entrepreneurs.” She said it is apparent that the country is still a long way from reaching its objectives of transforming the economy to achieve meaningful broad-based black participation.
The meeting heard several calls for a change of ownership of the South African Reserve Bank (SARB) and concerns about broad-based black economic empowerment (B-BBEE) fronting with regards to the South African Social Security Agency (Sassa)/Cash Paymaster Services contract. Committee Member Mr Geordin Hill-Lewis wanted to know if the alleged fronting was being investigated. He was told that the B-BBEE Commission has requested information from Sassa on the matter.
Committee member Mr Floyd Shivambu said it is a dismal failure that the NEF only receives R1bn in funding annually, but is expected to empower black people in an industry worth R1trn. He also called for the private ownership of SARB to be discontinued.
In reference to questions regarding the closing of the Gupta-owned Oakbay bank account, the Deputy Governor of the SARB said that in terms of the relevant legislation, banks only close accounts as a last resort. He said although privately owned, the owners of the SARB have no say in policy, which is set by government. He also said that most of the SARB board members are appointed by President Jacob Zuma.
In another presentation, the Black Management Forum (BMF) called for the criminalisation of collusion, saying fines are not enough. BMF said that executive directors of such companies should face criminal charges.
The Co-Chairperson of the meeting, Ms Joanmariae Fubbs, concluded that despite 23 years of democracy, little has changed in the financial services sector. She said it was clear from the day’s admissions that white people continued to dominate top management structures in the financial services sector.
Rajaa Azzakani
23 March 2017
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