A group of former activists from the United Democratic Front have identified banks used by individuals who are believed to have engaged in illegal proceedings related to State Capture, and have appealed to the four leading banks to close or freeze the accounts of those they have named.

The letters from the UDF Veterans – grouped together as the UDF Veterans’ Network – were sent to Investec, the Nedbank Group, ABSA and the Standard Bank Group, along with supporting correspondence to the Reserve Bank and the Banking Corporation of South Africa. They attached a list of almost 20 prominent individuals who have been associated with alleged procurement irregularities.

These include former SSA head Arthur Fraser and his brother, Barry; former Deputy Finance Minister and current Deputy Minister of Agriculture, Forestry and Fisheries Sfiso Buthelezi; former CEO of the Passenger Rail Agency of South Africa (Prasa) Lucky Montana as well as Prasa’s one-time chief procurement officer, Josephat Phungula.

The UDF Veterans request the banks to urgently investigate the bank accounts of these individuals and their companies, and close or freeze those accounts which, the UDF Veterans claim, have been “improperly benefiting from public funds”. The letter states:

“We note that this has been done in the case of other individuals/companies implicated in State Capture activities.”

The letter has been signed by the Veterans’ Network Co-ordinating Committee, who were reluctant to have their individual names published only because they say they are representative of the veterans’ group as a whole.

The letter refers to former public protector Thuli Madonsela’s 2015 report entitled “Derailed: A report on an investigation into allegations of maladministration, financial mismanagement, tender irregularities and appointment irregularities against the Passenger Rail Agency of South Africa (Prasa)”. In it she details evidence of systemic maladministration at nearly all levels of Prasa’s financial management, tendering and appointment processes.

A key remedial action prescribed at that time by Madonsela required the chairperson of the Prasa board to “commission the National Treasury in conducting a forensic investigation into all Prasa contracts above R10-million since 2012 and take measures to address any findings regarding systemic administrative deficiencies allowing ongoing maladministration and related improprieties in its procurement system”. This came shortly before her term of office ended and she noted that she could not get access to many of the relevant documents relating to procurement.

In February 2016, the National Treasury, in compliance with the public protector’s directions, commissioned forensic investigations by a number of independent law firms into 216 contracts awarded by Prasa between 2012 and 2015. Of these, only 13 were found to have been above board.

The individual forensic reports and Treasury’s report based on them have never been released publicly or presented to the relevant oversight bodies. They have, however, been leaked and are in the public domain (See the #UniteBehind website.)

The UDF Veterans’ letter goes on to say:

“If any of these individuals and companies are indeed involved in unlawful and corrupt activity, they would in all likelihood have used their local banking accounts to move the proceeds of their corrupt acts, either within South Africa or across the border.

“We are a network of UDF Veterans, based in the Western Cape. Our interest in this matter is the hugely negative impact that the alleged corruption within Prasa is having on citizens of Cape Town, in particular those who are affected by the virtual collapse of rail services in the city.”

The UDF veterans asks the banks to “study these documents in order to determine whether any of the individuals and/or companies implicated therein have used your banking facilities to transfer funds which may be related to corrupt acts”.

Two banks have responded so far, with Nedbank assuring the UDF Veterans that its Chief Executive, Mike Brown, has requested Nedbank’s Group Financial Crime and Forensic Services to investigate the matter and to report back to him.

“The Nedbank Group is strongly committed to ensuring that our facilities are not abused for corrupt or other criminal purposes, and we wish to assure you that the matter will receive the necessary attention,” writes Gerda Ferreira, Nedbank’s Executive Head, Group Financial Crime and Forensic Services.

Standard Bank’s Chief Executive Lungisa Fuzile also responded.

“We would like to begin by saying that, as a corporate citizen, Standard Bank values civic activism and very much respects the work that the UDF Veterans Network has done to expose and resist any corruption,” Fuzile said.

While the response falls short of agreeing to conduct an investigation, Standard Bank goes to lengths to assure the UDF veterans that it values and appreciates the efforts of those stalwarts of the 1980s Struggle against apartheid.

“While we cannot give you the information you have requested, we are confident that we have acted correctly and ethically in relation to the clients and matters that you raise. To put the same point differently, under South Africa’s Constitution and statutes, Standard Bank is obliged to rely on civil society, the media and the law-enforcement authorities to investigate, expose and prosecute corruption and other unlawful activities.

“We are grateful for your work, and we would like to assure you that we have never knowingly enabled corruption, or acted unlawfully and we always seek to comply with our regulatory obligations.”

Prasa is one of the State-owned Enterprises that was included in Parliament’s State Enterprises Committee’s investigation into State Capture. Earlier in 2018 the committee heard evidence from former Prasa Group CEO Lucky Montana arising out of reports of procurement irregularities.

Standard Bank goes on to say it is obliged to comply with the international and South African legislation that applies to financial services firms, including the Financial Intelligence Centre Act 38 of 2001, The Prevention of Organised Crime Act 121 of 1998 and the Prevention and Combating of Corrupt Activities Act 12 of 2004.

“The combined effects of this and related legislation and law governing the banker/client relationship are 1) to prevent us from confirming or denying the existence of client relationships 2) to require us to report suspicious transactions to the law-enforcement authorities and 3) to do nothing that could “tip off” alleged wrongdoers to the fact that (we) have reported them to the authorities.

“Please be assured that we are committed to upholding the Constitution and the rule of law, and to using the resources entrusted to us by society to promote inclusive growth.”

The UDF veterans reconstituted themselves in 2017 to add their voice to the #ZumaMustFall campaign. It is now engaged in grassroots issues, with a focus on the collapse of the public transport system in Cape Town, which has posed a serious challenge to students and workers.

The UDF, formed in 1983, was a huge umbrella body representing more than 400 civil society organisations, trade unions, churches and other bodies engaged in the anti-apartheid Struggle. DM

This article was amended on May 8, 2018.