I am bound to comment on a column which appeared in Business Day on Monday July 26, On the Money, written by Stuart Theobald. His theme is that banking licences aren’t easy to obtain and he then details the efforts made by me and two others through a company called Ban Konsult to establish an investment bank in this country.

The first error in the column is that the application made by the company actually was for an authorisation to establish a bank (which the Registrar’s office happily called The Production Bank). It was not for a banking licence. The two are distinctly divisible and separate. That was the nub of the argument. We were unable to persuade the Registrar, who refused to talk to us, of this difference. Nor were we able to persuade two judges that the regulations were written in a manner so narrow that they defy easy interpretation.

In the event an authorisation had indeed been granted the next steps would have been to secure the appointment of a competent board, all the members of which would have required the Registrar’s approval, and then to have tapped as many sources as would be available for seed capital. Only then would an application have been lodged for a banking licence.

There was nothing bizarre in either the concept or the application, though I accept that Theobald is perfectly entitled to arrive at that conclusion. I wish, though, he had talked to me first, which I would not think an unreasonable request. It is, in fact, among the first rules of good journalism

For example, when discussing my own banking experience he glibly says I was a consultant to Cape Investment Bank (CIB) and then adds “…which hit the wall in the early 1990s.” I do hope he is not suggesting it hit the wall because of me. And, if he had dug around a little more he would have unearthed the surprising but-cast-in-concrete fact that this bank, allegedly badly managed, paid out more than a rand in the rand despite the best efforts of liquidators and assorted lawyers to extract as much from it as possible. CIB’s problems were political in nature; they were certainly far removed from its liquidity or profitability.

And he would also have discovered that its managing director, Andy Swartz, was deliberately stuffed into deep freeze while awaiting the state’s pleasure before charges were brought against him 11 years after the event. And, as it turned out, Swartz, who conducted his own defence, walked away a free man. Except that 11 of his most potentially productive years had been stolen from him. This was a disgraceful and disgusting episode for which the office of the Registrar of Banks bears much responsibility.

There isn’t much more to be said other than that the current Registrar, Errol Kruger, has taken it upon himself to rewrite the government’s policy of ensuring transformation in every part of economic life. This bank, for which an authorisation and not a licence was requested, would have been predominantly black-owned, the first of its kind in the country. And it would have been staffed with the best talent available on the basis that skills transfer would have been a paramount policy. I fully expect that someone will steal this concept.

Shifting quicksands

The ANC is the best positioned of all this country’s political parties: the poor vote for it in the hope it will deliver on some of its promises; if some of them get rich, they vote for the ANC because they hope to be recipients of its tendering largesse.

Moeletsi Mbeki, no stranger to controversy and to shaking up conventional thinking, has delivered another fascinating memoir in the shape of a note on the political scene issued by Nedbank Capital (July 15). He says quite bluntly that the ANC’s supporters absolutely do not vote for it for its ideology or policies: “they vote for it primarily because of their material dependence on the ANC-controlled state.”

Mbeki’s analysis derives partly from a November 2009 study conducted by market research company Ipsos Markinor and a July 2009 National Incomes Dynamics Study by UCT.

Between 53% and 75% of SA’s black population is classified poor. If you assume the lower number and use 38.4 million as the country’s black population (80% of 48 million), then 20 million blacks live in poverty. As Mbeki points out, if it is assumed that 50% of that 20 million can vote, then the ANC can count on the support of 10 million votes out of a total of 22 million registered voters. It doesn’t need many more to win every election outright.

According to Mbeki, this means the country is politically predictable. It also means that it suffers from the ills that surround all single-party dominant governments: corruption is widespread; incompetence is everywhere (Eskom, SABC etc) and the “political and economic equilibrium leads to economic malaise.”

Looking at other factors, almost 70% of those supporting the ANC either have no education or did not complete high school while only 29% of DA supporters haven’t completed matric. And 32% of DA voters have tertiary education qualifications compared with 8% of those who support the ANC.

And Mbeki notes that, among those out of the political loop of influence over the ANC government “As to be expected, it is those of little voice who are the main taxpayers that finance the social welfare programmes of the black poor and provide subsidies to multinational corporations to entice them into basing their operations in South Africa.” And he notes that R2.7bn has been allocated as a subsidy to foreign companies making cars in this country over the period 2009-2012.

But the denouement comes in his last sentence in which he warns that successive Greek financial crises simply highlight the path South Africa might follow which could lead to “…the emergence of new parties as well as to the further disintegration of the ANC.”

Note: further disintegration. Ho, hum…

Jolly junket

While the vicious hostilities between Communications Minister Siphiwe Nyanda and his ex-director general Mamodupi Mohlala seize all the headlines, try this little story for fun.

Everyone knows by now that the inner wrangling in the ministry has its roots in which system to use for the country’s translation from analogue to digital broadcasting and reception. South Africa opted for the European system some years ago when this policy was written in stone and appropriately gazetted. Along come the Japanese and their supporters, the Brazilians who have chosen the Japanese system instead. Look, they whine, if you convert to our system there will be a bigger market and unit costs will come down (whose, ours or theirs?).

So, did Nyanda send a delegation to Brazil to investigate this, asked ID leader Patricia de Lille. Yes, answered Nyanda. The trip cost R579 000. There’s a list of those who went on this jolly; unsurprisingly, those actually involved in the technicalities seemed in short supply.

Now another jolly is planned. Whatever for? And who will tag along? And at what cost?

And note this: three countries use the Japanese standard; 120 use the European standard. Who is trying to fool whom here?
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In the State of the Nation tonight, Wednesday 28/7 on Classic 102.7
Opposition politics with Patricia de Lille, Frans Cronje and Stephen Friedland;

Seabed distortions in the Mexican Gulf and fears of a massive methane explosion that could spell disaster for the planet with US journalist Terrence Aym