When we at the Institute of Race Relations (IRR) launched our corporate pressure campaign in February against the destruction of property rights through expropriation without compensation (EWC), we were hoping to get a cat out of a bag. We were not expecting three cats to follow the first in quick succession.

The first cat emerged rather slowly, almost cautiously, with the IRR receiving tepid responses from banks about their inauspicious silence on the risks arising from the threat to their clients’ property rights. The second cat emerged from the bag on 12 February with the publication of a column in Business Day by Cas Coovadia, managing director of the Banking Association of South Africa (BASA). The third cat left the bag on 18 February when Coovadia appeared on Kyknet Verslag. When Cyril Ramaphosa and Tito Mboweni endorsed the grabbing of pensions, the fourth cat shot, meowing, from the bag. Let’s take a look at these cats.

Cat One

In writing open letters to prominent members of corporate South Africa, the IRR asked (and continues to ask) important if awkward questions – that, after all, is a vital part of the job of a think tank. We first wrote to banks, of whom we asked a simple question: would they expect their clients to pay off a bond on expropriated property? This question is what you might call a R1.8 trillion question, for that, according to BASA’s Cas Coovadia, is the size of the banks’ exposure to a nullification of the value of land through EWC.

A pattern, soon to be replicated when other members of corporate South Africa hid behind commercial aggregates of convenience, quickly emerged from the responses we received from targeted banks: we, the banks, think land reform is important; we won’t say anything about the security of property rights; we won’t state our opposition to the destruction of property rights; we won’t be standing up for the property rights of our clients; we didn’t make submissions to Parliament in opposition to EWC when we could have done so; we will be expecting our clients to pay for the privilege of losing property through EWC; and, if you want to ask any further difficult questions, we would rather not answer – speak to BASA instead. Referring us to BASA directed our attention to the next bolting feline.

Cat Two

In his Business Day column of 12 February, Coovadia goes through a number of concerns by the Banking Association. He rightly mentions the financial problems which can occur if a bondholder’s land is expropriated without compensation – or with compensation that is below market value. Such a situation would be disastrous for South Africa’s financial service providers. Coovadia rightly sets out the importance of judicial oversight – which the ANC has now jettisoned – and the negative effects which the mere discussion of EWC is having. Coovadia writes,

“A lack of clear and decisive political leadership is undermining assurances by President Cyril Ramaphosa that expropriation without compensation will be done in such a way as not to harm economic growth and food security. We recommend that an independent impact assessment be done to ensure this is in fact the case.”

Given this strong statement, Coovadia inexplicably goes back to appeasement in the final part of the article, when he states,

“we are serious about Ramaphosa’s undertaking that this will be achieved without damaging our prospects for economic growth, our food security, and within the confines of the law.”

One can’t help but be dumbfounded by this. Coovadia lists a number of very serious issues which BASA has with EWC, but ends by saying that he is “serious” that EWC will be achieved without any of these aforementioned problems. What is this even supposed to mean?

Besides, the justifications used by Coovadia are equally hypocritical. BASA says that the current patterns of ownership “have their origins in apartheid and colonialism”. If this is all about redress for colonialism and apartheid, why should the banks’ clients bear this burden? Banks as institutions are far older than most of their clients and, to an even greater extent than any client, owe their prominence, success and the functioning of the financial system to the legacies of colonialism and apartheid. And yet they are the ones demanding the difference between market values and “just and equitable compensation” partly because of historical land issues. This suggests a nauseating self-righteous eagerness to throw their clients under the bus to save their own skins. Banks should be standing with their clients against EWC rather than trying to justify it as a means of appeasing the government.

From the start, South African banks have just been unwilling to say that they oppose expropriation without compensation. This is not about rural land being taken from Oom Piet se Ou Vrystaat Boerdery, as the ANC would have you believe. This is about the destruction of property rights and the stripping of citizens’ fundamental human rights. Just ask David Rakgase, or read the proposed legislative instruments to bring about EWC. Why does the proposed bill state that property which is expropriated shall not be given to new owners in the form of title deeds? Were EWC about redress, this would be the obvious path to follow. The fact that this is not the path to be followed is telling.

Coovadia demonstrates that he clearly understands EWC’s negative economic consequences. That he cannot simply state opposition to it in clear, unambiguous terms is a red flag with government appeasement stamped on it. Bank clients need to demand that the banks will be on their side against the leviathan of the state rather than trying to cover all their bases before a looming economic crisis.  

Cat Three

“Where land is being expropriated, government needs to guarantee the repayment to the banks, okay?”

I’ve listened to Cas Coovadia saying this tens of times – each time making sure that I didn’t mishear him. That is exactly what Coovadia says; where bank clients lose their property to the state via a policy the banks cannot bring themselves to oppose, the banks are simply demanding compensation from the state. It really is ironic: almost every single bank the IRR has contacted on this issue has referred us to BASA – and here we hear BASA speaking. Perhaps the banks thought the corporate safety in numbers offered through BASA would provide some cover, or that we might leave them to sell out South Africans by homing in on BASA instead. I cannot imagine that what they had in mind was BASA coming out so openly and making it clear that banks, far from lifting a finger to protect their clients’ interests, would demand the protection of their own interests from the state – at taxpayers’ expense. The hypocrisy is astounding. At best, the banks should be considered appeasers – at worst, they should be considered sell-outs of the basic rights of South Africans.

Cat Four

Speaking of taxpayers’ money – who’d have thought that Cyril Ramaphosa and Tito Mboweni would look at VBS and see not a disastrous theft of the pensions of South Africans, but a plan by which to loot funds to bail out the ideological failures of the National Democratic Revolution, nurtured by the same statist instincts that impelled the National Party’s social engineering? Yet, here we are: the President and the Minister of Finance openly approving the government’s intention to expropriate without compensation the savings of ordinary citizens.

While the issue of land offers the historically loaded and politically useful premise of the injustice of black South Africans losing land to an oppressive government (the present government all the while blithely ignoring its own reheating of the vilest ideas of previous racist regimes), the pension grab now endorsed by the supposedly right-minded champions corporate South Africa opened their wallets for on their passage to the Union Buildings enjoys no such historical defence. Yet bittereinder Ramaphoriacs like Adriaan Basson have fallen in line to meekly nod their assent at yet another racial nationalist government willing to sell out the people of South Africa in the pursuit of an ideological project that is doomed to fail.

In a brilliantly damning piece in the Beeld of 9 March, economist Mike Schussler lays out the dangerous idiocy of the ANC’s pension grab. While the sheer numbers are terrifying (especially Schussler’s point that pension funds are already invested in state bonds to the tune of R2 100 billion and that a further R800 billion would be confiscating the fragile eggs of an entire generation to put into a fraying basket), the reality of the VBS-as-pioneering-idea judgment really hits home in Schussler’s pointing out that two thirds of South Africa’s pension pot is, in fact, the pensions and savings of black South Africans. A politically inconvenient point, and one that underlines why our four feral cats are born of the same economically disastrous ‘EWC’ litter.

Yet, even as they scatter the pigeons of the markets, rattling South Africa’s barely-there economy and the financial stability of systems and households, corporate South Africa remains silent.

As the IRR pressed home its campaign by paying personal visits to one sleek, architecturally edgy corporate head office after the next – handing over letter after letter, seeing official after official, making appointment after appointment – it was hard to resist the temptation of thinking of these plush suites as being in another country.

As the policy madness of the ANC escalates, the silence of the corporates is deafening.

But the cats are out of the bag.

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6 COMMENTS

  1. Banks as usual – and expected – have no loyalty except to their own wealth! They will happily throw any clients, investors, savers under the next convenient bus as it may suit them.

  2. Corporate SA is the only reason that the ANC came into power, and all the bigwigs in the ANC became multi-millionaires

  3. Perhaps next time the sheer foolishness of the banks must be placed directly in their faces?

    Coovadia said that they would support EWC and claim payment of their loans from the taxpayer, in other words their clients ultimately, so long as their mortgage market would remain strong and they could look after their clients’ interests going forward.

    What mortgage market would remain when EWC arrives?

    Perhaps publicly challenge Coovadia to answer that simple question???

  4. It is extremely sad to read that the custodians of SA’s wealth are in bed with government’s failed Marxist’s ideas, hell bent in destroying SA as Marxist’s ideas destroyed other countries.

    “Man is the measure of all things,” so said Protagras about 2500 years ago and as we define value, good, bad, evil etc, this is a valid truism. Therefore it is logical as the measure of all things that the Human potential has far greater value to society than gold, silver and industry.

    This the banks and corporate society in SA has never understood. Cas Coovadia is a prime example. In an angry email in 2007 I wrote to Coovadia complaining how banks held back SA industrially. In response, he offered to get the Banking Association to meet Vic van Vuuren, CEO Business Unity SA, and Prof Marcus deputy chair of the SA Academy of Engineering to discuss my plan to industrialize squatter camps and bring them into the formal economy by making them economically productive. After my presentation all including the Banking Association of SA agreed that the plan would work and approaches were made to government by all three, but to no avail. Later in 2012 I discovered through correspondence with the DG at Housing, that Housing did not want to use RDP housing to create jobs and industry as Joe Slovo stated would happen, but buy votes at election time. As correspondence shows Sisulu was also behind this

    The Banks, Coovadia, Business Leadership SA and Business Unity SA know that there are industrial business plans capable of lifting squatter camps out of poverty into the formal economy, but prefer, like government, to keep the majority in poverty. This intentional act against the black jobless people, in my mind, is criminal.

  5. Question is , how do we get the man in the street involved ,or at least get them to start thinking about their hard earned pension (survival ) , in which ever form . I went for bricks and mortar which now seems to be under threat as well as the “tried and TRUSTED ” financial institutions……and look what has happened the last few weeks . My friends tell me that at my age (72 ) , it will be near impossible to recover fully .

    While we are on the topic of losing money , how do we start an action to get rid of Proportional Representatives ( PR ) at Local Government level. Imagine the saving if al Local authorities can cut their budget for councillors by approx. 50 % by relieving ourselves from these people that have no obligation to the ratepayer , other than serving their political masters .

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