The Institute of Race Relations (IRR) has written to leading South African financial institutions this week to ‘come clean’ on whether they are party to talks with the government on making savings and pensions available for government or government-run projects, and whether they have informed their clients of any such discussions.
The IRR said in a statement the letters were prompted by the recent statement by Dr Kgosientso Ramokgopa, head of the Investment and Infrastructure Office in the Presidency, on talks with the financial sector on exploiting the ‘big pool of liquidity’ of private funds for government projects.
Letters have been sent to Absa Group Limited, First National Bank, Standard Bank, Nedbank Group Limited, Investec, Sygnia Asset Management, Old Mutual, Citadel, Coronation Fund Managers, Sanlam, Alexander Forbes, and Liberty Group Holdings to ask them to clarify their position.
The IRR said that in recent months it had embarked on a broad engagement with many of these institutions and entities ‘to elicit answers on their willingness to make the savings or pensions of their clients available for government projects through the mechanism of prescribed assets’.
These efforts ‘have been met with varying degrees of transparency and collaboration’.
It noted that Mr Leon Campher, CEO of the Association for Savings & Investment South Africa (ASISA) – to whom many respondents to previous correspondence referred the IRR – ‘dismissed the risk of pensions and savings being used to fund government projects’.
However, IRR deputy head of policy research Hermann Pretorius said that, in light of Dr Ramokgopa’s statements, ‘these dismissals now seem misleading’.
The new round of letters, he said, was intended to gain ‘clarity’ on whether institutions had been party to talks with the government, or were knowingly represented in them; whether their clients had been informed of this; what steps were being taken to safeguard clients’ assets, or address clients’ concerns about making resources available to a government that had shown itself to be prone to corruption and which had yet to dismantle the ‘structure of state capture’; and what considerations had been given to ‘liability in terms of the consequences of unsound investment decisions’.
Commented Pretorius: ‘The entirety of the savings and financial industry is founded on trust. Countless amounts are spent yearly through sophisticated marketing campaigns to convince people to trust this industry with what they’ve worked hard to earn throughout their lives. As is well known, trust once lost is dearly regained.’
It was hoped that the companies addressed in the letters sent this week ‘will consider this an opportunity to be straight with the South African public and to demonstrate that they deserve their clients’ trust’.
He encouraged the financial sector to ‘work with the IRR to protect the pensions and savings of South Africans against a state that has shown itself to be callous at worst and incompetent at best in the management of the hard-earned money of ordinary people’.