Friday 23 June 2017

Barclays Africa Hit by Protesters Demanding Apartheid-Era Money

Barclays Africa Hit by Protesters Demanding Apartheid-Era Money
(Bloomberg 01/27/17)
Barclays Africa Hit by Protesters Demanding Apartheid-Era Money

Barclays Africa Group Ltd. was targeted by protesters who entered one of its branches on Thursday and demanded the bank pay back money from a bailout provided to a company it bought before the end of apartheid.

Demonstrators linked to the youth league of South Africa’s ruling African National Congress gathered outside the branch in Durban on South Africa’s east coast, Johannesburg-based Barclays Africa said in an e-mailed response to questions. Police ensured customers and staff were protected during the incident, it said.

The protests come after the leaking of a draft report compiled by South Africa’s graft ombudsman that said Barclays Africa, which traded as Absa then, may have unduly benefited from state support when it bought Bankorp in 1992. A panel appointed by former Reserve Bank Governor Tito Mboweni found in 2002 that Absa’s shareholders didn’t derive undue benefit from the central bank’s intervention and said restitution shouldn’t be pursued.

“Our stance remains that Absa doesn’t owe the government money,” the bank said. “We settled our obligations in October 1995 and the Public Protector’s draft report contains legal and factual inaccuracies.”
Shares Drop

Barclays Africa reversed earlier gains to trade 0.1 percent lower at 164.91 rand as of 3:22 p.m. in Johannesburg. The stock has declined 2.2 percent this year, the biggest drop in the six-member FTSE/JSE Africa Banks Index.

The ANC Youth League bused hundreds of supporters from around the KwaZulu-Natal province to join the protest outside the branch in the Durban central business district as part of a national call for action against Absa, Johannesburg-based News24 reported on its website. Some gained entry into the branch, while others danced and sang in the street, clad in yellow ANC T-shirts decorated with President Jacob Zuma’s face.

Barclays Africa accepted a memorandum from the protesters, with the situation now under control, the company said.

Zuma has questioned why South Africa’s largest banks decided to shut the accounts of companies related to the Gupta family, who have been accused of using their friendship with the president and their business ties with one of his sons to influence cabinet appointments. Zuma and the Guptas deny any wrongdoing. The lenders have said that they never acted in concert and in separate statements have said that continuing to do business with the Guptas risked hurting their reputations.

Another political group, Black First Land First, said in a tweet it wanted “rolling mass action to force Absa to pay back the money.” In another tweet, the organization said that once it’s “done with Absa,” it will target First National bank, which is a unit of FirstRand Ltd., Africa’s largest lender by value. It is calling for a national picket to be held on Saturday in what the organization said will be the first of many actions against Absa.

Renee Bonorchis

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