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By Chantelle Benjamin
Johannesburg
Business Day: THE cabinet yesterday referred a damning forensic audit on the Land Bank to the National Directorate of Public Prosecutions, with a view to possible criminal prosecutions.

The cabinet also ordered that criminal proceedings be instituted against all those who were identified in the audit “as having personal interest, (and) acted inappropriately and negligently”.
The bank’s poor performance is seen as major obstacle to SA’s land reform efforts and its attempts to nurture black farmers.

The cabinet said a major review was required of the bank’s executive and nonexecutive management, and of the performance of the board, to determine if directors acted with due care and responsibility.

The cabinet tasked the agriculture department and treasury to ensure the bank developed a turnaround strategy by the 20th of the month, and that stability be restored to the institution, which has had a succession of CEs in the past 10 years.

Alan Mukoki resigned as CE in July amid allegations of mismanagement.

Those identified in the audit report as having acted inappropriately and negligently should have criminal action taken against them, and efforts should be made to recover “undue” benefits derived by third parties.

It was also recommended that internal disciplinary measures be taken against anyone named in the report as having failed to act in terms of their duties, and that the bank take appropriate action to address any issues emanating from the report relating to its operations and business. A review of all written-off loans would also need to be undertaken, the cabinet said.

The announcement yesterday was welcomed by the agricultural community — in particular by AgriSA, which “welcomed any action that would ensure the bank operated on a sound basis”.

Johan Pienaar, AgriSA’s director of economics and trade, said: “Our farmers have exposure to the Land Bank, so we would obviously like to see it operating properly.”

Pienaar and Lourie Bosman, president of AgriSA, said they had met recently with the bank to discuss the need for the bank to become more competitive.

“Because of bad performance the bank’s credit rating has decreased and borrowing from the capital market has become more expensive.

“This has affected its lending rate and made it less competitive.”

The bank has had three consecutive qualified audit reports from the auditor- general and has been linked to a scandal in which R800m was loaned to Pamodzi Investment Holdings to allow it to buy a stake in Foodcorp.

The problem was that the money was given for a nonagricultural investment — against the rules — and questions were raised because African National Congress secretary-general Kgalema Motlanthe had shares in the company.

Kraai van Niekerk, the Democratic Alliance’s agriculture spokesman, said the move by the cabinet was long overdue. “I have a 10cm-thick file on the Land Bank, including allegations that staff were not following the rules, that they were paying out loans incorrectly.

“These were taken to the portfolio committee,” he said.

Van Niekerk said that according to his estimation the bank had write-offs totalling more than R1bn over the past three years — of which R350m were from the 2006-07 financial year alone.