Sometime this year, the latest chapter in the often-turbulent history of African Bank will be written when the South African Reserve Bank exits as the shareholder in the bank. The SARB’s position as a regulator and shareholder, is a unique anomaly that reflects an intersection between the challenges that have occasionally faced the bank since its founding, and the different ways in which regulators have responded to each episode in the African Bank story.
Its history is – naturally – a reflection of the fractured and turbulent arc of the black business story in South Africa. It was in 1964 where the genesis of the idea of a black bank was first discussed by black business leaders of the day. The main lobbying and advocacy platform of the day – the National African Federated Chamber of Commerce (NAFCOC) – identified the continued denial of access to funding for black business as the major challenge of its time. In seeking to unlock the funding bottleneck created by the twin pillars of apartheid legislation and the hostility of traditional banks to funding black businesses, NAFCOC resolved to champion the creation of a black bank. As it turned out, the issues of lack of access to finance were not unique to black businesspeople but were pervasive across black society. Having established that an amount of R1 million would be necessary to start the bank, it took NAFCOC an entire decade to actually raise the capital simply because black people at large had little capital to begin with.
Once the capital had been raised, African Bank opened its doors in 1975. The benevolence of other role-players was instrumental in assisting the founders of the bank convert it into reality. For a country that had systematically excluded black people from access to skills – especially the type of skills necessary to run an institution like a bank, the question of who would manage it was only resolved after Sam Motsuenyane travelled to London in 1972 and successfully lobbied Barclays to assist in training staff and investing in the bank itself. That sense of confidence in the bank and the expertise of the staff seemed to assist in unlocking the bank’s potential – between 1972 and 1974, the fundraising drive finally delivered dividends and the required amount was raised and African Bank had broken the access barrier and started operating in 1975.
Since then, the bank’s pillars of operational viability, governance and black ownership have shown mixed results. As it expanded in its early days, it needed to raise more capital and when it achieved that by tapping into the resources of new investors, the stake held by the founders, was gradually diluted. Its Chief Executive Officer – Moses Maubane – shepherded it though some its growth years but found himself on the wrong side of the governance and probity line when he went into bed with a group of buccaneering forex traders who wanted to add a forex trading arm to the African Bank business. That dalliance with white forex dealers, heralded one of the darker times for the bank which led to the first intervention by the Reserve Bank.
By seconding Jack Theron to replace Maubane as the CEO of the bank in 1988, the Reserve Bank achieved the ambition of ensuring that the bank survived the forex fraud scandal. However, the replacement of a black CEO by a white one would have created anxieties with the founders and other stakeholders – even if the understanding had been that he would eventually hand the bank back to a black CEO once it had been stabilised. As it turned out, Theron himself was not immune to nefarious activities. His actions as CEO – which included issuing dubious loans to white clients and a generous approach to writing loans for himself, led to the 1995 saga where the bank found itself insolvent and once again having to rely on the Reserve Bank to intervene.
That intervention, coming soon after the transition to democratic rule, no doubt had political dimensions simply because the idea of a black bank having survived the turbulence of apartheid only to fold in the democratic age, would have been difficult to countenance. Ironically, that intervention brought into the bank a period of relative stability under the guidance of Johan Louw, the curator from KPMG. Later on, however, into the CEO hot seat stepped yet another rogue banker in the form of Leon Kirkinnis whose mismanagement of the bank would lead to the latest curatorship in 2014.
It was on the back of this curatorship that the Reserve Bank stepped in as a shareholder. Since then, no doubt with the scars of the past and the benefit of hindsight underpinning the approach to managing this unique asset, the African Bank story has been a measure of discipline and prudence – at least on the operational side. In its 2020 annual report, the bank indicated that it had managed to cope well with the robust headwinds of the Covid-19 pandemic.
On the executive management and governance side however, it had sailed into turbulence yet again as its CEO – Basani Maluleke – resigned at the same time that a series of resignations had occurred within the board of directors. Such developments, left many stakeholders anxious as it seemed that the bank’s historical trajectory of turbulence, was being replicated yet again. When the Reserve Bank announced its decision to exit its shareholding, there was a real risk that the handover would materialise at a time when little in the way of executive leadership was going right. This put additional pressure on the board – led by Thabo Dloti – to find a capable chief executive officer and stabilise the bank’s executive team. The appointment of Kennedy Bungane in April 2021 as CEO was merely the first step into what was now emerging as the new turning point in the bank’s history.
Whilst that was welcomed by many, it was patently obvious that the stability of the executive team was a priority that had to be tackled before the question of where the SARB’s shareholding eventually ends up was to be finalised. The perceived instability of the leadership team, would have opened up the door for speculative investors to lobby for the stake with an eye on overhauling what little remained of the bank’s identity as a black institution. Alternatively, the instability would have resulted in a less-than-optimal offer being made for the bank’s stake.
Luckily, the appointment of Bungane seems to have ushered in a sense of urgency relating to the stabilisation of the leadership team. The current composition of the bank’s executive team has 5 black executives in a team of 9. In the expanded leadership team that includes heads of various strategic portfolios, 9 of the 13 incumbents are black and Indian. Such demographics have been influenced by the actions undertaken by Bungane since April 2021, where 5 of the senior executives have been appointed. For a board that had to defend its commitment to governance and transformation at the beginning of the year; African Bank’s appointment of 3 black female non-executive directors since April 2021, has aided the board achieve stability and simultaneously improve its demographics. These achievements are noteworthy and reflect the deep sense of commitment to transformation that Dloti and Bungane possess.
The quality of these appointments, together with the demographic profile of the new incumbents, is once again reflective of the vision that the founders of the bank had in their inaugural meeting in 1964 – a black bank run by black executives for the benefit of the black community. But more importantly, for a bank whose history indicates that whenever operational stability was achieved, governance faltered; and whenever governance was stabilised, prudential expectations were not met; African Bank stands at the unique threshold of getting those pillars to simultaneously exist and be effectively managed. The last pillar – the essence of ownership – remains under deliberation.
The history of empowerment deals in the banking sector since 2004, mirrors the established trends in BEE deals across the system. Individuals and consortiums who acquired stakes, required assistance to finance their stakes. Given the modest ownership targets set under the BEE codes – where 25% was the common target – none of the BEE deals ever resulted in a majority stake being directly owned by black shareholders.
Oftentimes, the need to repay the financing advanced meant a significant time lag between the acquisition of the ownership stakes and the enjoyment of the beneficial economic interest associated with the ownership. Additionally, as deals matured, diversification by investors meant some liquidated their minority shareholdings to pursue alternative investment opportunities. That practice on its own, led to a dilution of ownership stakes that could be directly counted in the hands of black people.
The African Bank transaction however, presents a unique opportunity for black investors as it is a deal relating to the controlling stake – the SARB holds 50% of the shares in the bank today with the Government Employees Pension Fund holding another 25% through the PIC. Additionally, whilst the costs associated with the acquisition of the BEE stakes in the large banks historically used market value as a starting point – with discounts then factored in to arrive at an acceptable price; this need not be the case with the African Bank stake. That is simply because unlike the share exchanges associated with previous BEE deals – where the need to compensate historical and legacy shareholders adequately for their stakes meant that the deal gravitated towards market value; the SARB has no such profit motive as its primary intention. Rather, its intention should be to utilise this unique opportunity to bolster the faltering empowerment profile of the banking sector at large by preferring a transfer to black shareholders rather than the fluctuating vagaries of the open market.
It is patently obvious that getting the SARB’s stake to end up in black hands – particularly through a broad-based ownership scheme – would be the one variable that ensures that after decades of turbulence, the vision of the NAFCOC meeting of 1974; and the hope of black shareholders that raised R1 million in 1964; and the promise of economic inclusion promised to all citizens in 1994 – are finally realised in the African Bank story.
Failure to achieve this, will be a missed opportunity that might not materialise again in our lifetime.
This article was issued on BusinessDay on 29 SEPTEMBER 2021 – 16:40 – https://www.businesslive.co.za/bd/opinion/2021-09-29-polo-leteka-radebe-african-bank-can-finally-realise-its-founders-vision/
ABSIP mourns the passing of Vassi Naidoo
Precisely 18 years ago this week – on the 30th of September 2003 – the Ministerial Panel for the Review of the Accountancy Profession Bill, tabled its report to the Minister of Finance, Trevor Manuel. The essence of the Review Panel Report, was to make recommendations regarding the future of the accounting and audit profession in South Africa. Whilst the panel was made up of esteemed professionals from across the spectrum, the name of Vassi Naidoo and his influence loomed large in the report. Naidoo – a graduate of the University of Durban-Westville, had by that time, already established a stellar track record in championing reform and adaptation in the profession. The genesis of his pathway towards championing reforms, originated from his own interaction with the chartered accountancy profession.
When he entered the profession by joining Deloitte in 1977, South Africa had just witnessed the qualification of the first black chartered accountant and the Soweto uprisings in the previous year. The issues prevalent in those days – fragmented access to opportunities acutely affecting black citizens, were more pronounced in ‘closed’ professions like chartered accountancy. His ability to penetrate that space and to do so with some distinction, became evident when in 1984, he became the first person of colour, to be appointed as partner at Deloitte. That came just a year before the formation of ABASA – the Association for the Advancement of Black Accountants of Southern Africa, which he naturally joined and supported proactively. From that moment, Vassi’s role in advocating for transformation of the profession and the support of young black people to enter and succeed in the profession, was both a micro and mega project; but always a personal and intimate story.
Within Deloitte, his influence in driving up the allocation of resources – bursaries and scholarships for black students in particular, was not simply a matter of signing the cheque but also dedicating his time to offering support and mentorship to young trainees entering the firm. On the macro level, his intimate appreciation of the need to invest in the future of the profession, was evident at the launch of the flagship transformation programme for the profession at large – the Thuthuka Fund – where he was the first leader to commit to the Fund with a donation of R2,5 million. That gesture set the tone for many of the leading firms to invest in the future of the profession itself.
In the late 1990s, his rise within Deloitte had culminated in his appointment as the CEO of Deloitte Southern Africa. Through it all, Vassi’s understanding of the need to adapt and lead with strategic intent, was reflected in the various initiatives he actively participated in aimed at mapping the future of the profession itself. The Ministerial Committee’s recommendations, reflected on the key issues affecting the accounting and auditing profession globally and locally. The resultant introduction and implementation of the Auditing Profession Act, which serves as the current regulatory guideline for the auditing profession, emerged from the recommendations of the Ministerial panel. Upon the end of his two terms at Deloitte, Vassi still had enough energy and drive to take on the role of leading within Deloitte and headed to the UK office. Even then, his commitment to making a difference remained unwavering.
When Minister Trevor Manuel addressed the UK-based members of the profession in May 2008 at the launch of Thuthuka in the United Kingdom, Vassi Naidoo was present in his capacity as a member of the Deloitte Global Executive Team; but also, a steadfast supporter of the transformation mission. Opening up spaces become synonymous with his legacy. Having been the first black person to become a partner and then CEO at Deloitte, he would have reflected with some semblance of pride at the fact that since then, Deloitte’s CEOs – Grant Gelink and Lwazi Bam – are black leaders who have taken on the mantle of leadership.
For a firm that had just one black African CA, 10 Coloured and 90 Indian CAs in its ranks when Vassi qualified as a CA in 1980; a firm where ‘Whites Only’ signs still adorned entrances to the toilets when Vassi joined; and where clients would seek to terminate contracts as soon as he was allocated to their accounts, such developments would not have happened without some element of commitment to lead it differently.
His role as the elder statesman of the profession and the world of business, is reflected in the roles he had occupied since his retirement from Deloitte in 2014. Having joined the board of Old Mutual and the Nedbank Group in 2015, Vassi served as the Nedbank chairman until his untimely passing at the age of 66.
In assessing the immense contribution Vassi made to the South African story, we are drawn to a memorable episode of the US sitcom Frasier, where its main character is honoured with a lifetime achievement award at the height of his career. Overwhelmed by it all, his simple response was ‘Thank you for honouring my life, I just wish I knew what to do with the rest of it.’
Ten years ago, when SAICA awarded Vassi Naidoo with the rare Lifetime Honorary Membership in recognition of his services to the profession, Vassi saw it not as an end to a life of service, but an invitation to dedicate even more effort to making meaningful change in the spaces he was able to influence. Upon accepting the award, he stated “I am delighted by this honour as it highlights the contribution I and others have made to the profession throughout the years. I have been a member of Thuthuka Bursary Fund, Ministerial Committee, and when I moved to the UK, I continued to participate in SAICA and the profession’s activities.”
Remarkably his imprint in the arenas of transformation, governance and leadership in the decade since that award; indicates that he was a man who knew exactly what he wanted to do with the rest of his life – and achieved it with some distinction.
The Association of Black Securities and Investment Professionals would like to convey its sincere condolences to Vassi’s wife Sheila, and the entire Naidoo family during these difficult times. We hope they find strength in the fact that Vassi’s legacy, will be remembered for generations to come.
1 March 1955 – 28 September 2021
Polo Leteka Radebe
30 September 2021
After a period of great turbulence across the globe that has amplified pre-existing divides and highlighted the fragility of societies, we have all had to revisit and reconsider the way we work and interact. In the South African context, the recent developments have once again highlighted some of the major challenges that require continuous interrogation and deliberation.
As the world reflects on the effects of the pandemic and its long-term impact on societies, we are also witnessing the rise in vaccination programmes that are enabling many communities to gradually take control of their spaces. The road ahead, is likely to be a combination of management and mitigation.
Learning to manage the new ways of doing things and still delivering value to stakeholders is going to be a key challenge for the financial sector in particular. Mitigating the effects of the pandemic on all stakeholders – whether through offering solutions that are responsive to the current challenges; or creating new products for the future, the prospects are quite exciting.
Within the financial services space, the interruptions have been pervasive and the shifts have been gradual and dramatic.
Highlighting the achievements and successes of the various institutions and individuals that have navigated the pandemic to deliver value to their stakeholders during extraordinary times, is the big theme underpinning the 2021 ABSIP Awards.
As the flagship recognition platform for the country’s financial services sector, the awards play an important role in celebrating success and excellence in transformation. This year, in response to the evolving nature of the sector, we have engaged with stakeholders across the board in order to put together a programme that reflects the key practices and fundamental principles of the financial services universe.
We invite all stakeholders to submit their nominations for the various categories that will be honoured. The full list of categories is available on 2021 Awards site.
Over the next couple of weeks, we will be announcing some exciting developments ahead of the awards including the details of the ABSIP Awards Jury and the logistics of the event.
At this stage we would like to highlight that the awards are scheduled for the 25th of November 2021.
Nominations are open from the 4th of October 2021 and can be accessed HERE.
We are looking forward to an awards function that is reflective of the dynamic world we live in and the excellence of the ABSIP community in driving the financial services sector.
The National Executive Committee of ABSIP is pleased to announce, that after a detailed search, Mr Melusi Sigasa has been appointed as the Executive General Manager of ABSIP.
The appointment of the Executive General Manager, is in line with the commitments made by the NEC at last year’s AGM to strengthen the ABSIP back office in order to improve our capacity to deliver to our members.
Melusi – a graduate of UKZN and an MBA alumnus from the Gordon Institute of Business Science (GIBS) brings to ABSIP a diverse set of skills harnessed from a career in the financial services, fund management and the advocacy sector.
His recent role – as Programme Director at Enactus South Africa – responsible for local and international programme management and digital innovation, enables ABSIP to bring into its ranks skills that will be of critical importance in our journey to becoming an agile and responsive organisation.
As the financial services industry evolves and adapts, ABSIP’s delivery to its members similarly needs to adapt. Melusi’s skills in driving that process, makes his appointment an exciting development for ABSIP.
As the President of ABSIP, I am pleased to welcome Melusi as the Executive General Manager into the ABSIP family on behalf of the National Executive Committee and the entire ABSIP family.
Just over 6 years ago in 2015, I was privileged enough to be invited to speak at a conference in the financial services space. The sense of privilege emanated from the fact that I would be sharing my insights and learning from the perspectives of peers around various critical matters in the financial services space. Regrettably, that sense of privilege quickly mutated into a sense of muted horror when I discovered that over 20 years since the dawn of democracy, the conference organisers had somehow conspired to put together a line-up of 22 speakers which included just two black speakers and the only lady on the programme was a moderator from a television station.
In direct response to this, I lamented that the cause for this glaring anomaly could be one of three things that immediately came to mind. Maybe the reason was that there were no blacks or women in the industry who merited a place on the conference programme. However, the fact that I was there and that I knew of so many other capable black and female professionals across the entire financial services network; meant that was quite simply not true. Alternatively, it could have been attributed to the theory that blacks and women can’t speak authoritatively about their fields of expertise or are not good enough which would be a poor reflection on us as incumbents in the industry since it would merely mean that we have performed poorly in preparing black and female professionals for this critical part of brand building for a professional. Or lastly it could be that conference organisers blatantly overlooked people of colour and women and continued to be comfortable with creating segregated spaces and finding comfort with the notion that the financial services forums remained the purview of white men.
Whatever the cause underpinning this state of affairs, it was evident that there would need to be a course correction in the way we approached delivering these conferences and built-up talent within the financial services space. It goes without saying I have never been invited back to that platform and in recent years its value has diminished as the whispers on transformation in conferences became deafening screams.
I intentionally say deafening screams because for one not to hear them as recently as 2015; one must surely be deaf and therefore not able to hear what not just the South African market but the whole world is saying.
It is shocking that several prominent companies and conference organisers in the SA space in the last 3 to 4 months have still managed to put together conferences that were both imbalanced and untransformed with a clear slant away from everything we have been talking about.
Further exacerbating the issue is that there has been open and public calling out of the firms that have made the mistake on social media platforms such as Twitter and LinkedIn and even sometimes via direct mail to management. Some of the businesses have come back to apologise for what they called oversight and made changes to the composition of conferences.
The simple reality that all companies and stakeholders need to appreciate is that the mood has truly changed and that there will be no tolerance for conferences and panels that do not reflect a transforming industry and do not give an opportunity for participation by blacks and females alongside their white male counterparts.
As ABSIP, we therefore support the clarion call that has been made by leaders in the industry some of whom are Trustees of large and notable pension funds, some of whom are asset managers to actively require conference organisers to publish speaker lists and where said conferences are not transformed or balanced to show our discontent by boycotting said conferences and to make sure we scream even louder so that even the intentionally deaf can hear.
As we still push for the transformation agenda to be fulfilled, we cannot leave untransformed spaces to thrive under the guise of ‘we couldn’t find them’. Conferences and investor summits serve as an important platform for businesses and professionals and need to reflect the commitment we all profess to championing. We seek the industry to transform across all value chains including those which historically may have been seen as support or ancillary but which we recognise and being critical to the growth of professionals and businesses. If the conferences won’t transform, then we won’t come.
By Langa Madonko
Deputy President Absip and Conference Speaker
The newly elected ABSIP Women in Focus (AWIF) 2021 Leadership embarked on a fresh and energised start to the year. Under the leadership of Mametja Moshe and her deputies Lynn Miller and Nomonde Zwane, the team is comprised of 13 sub-committee members. Since its tenure, the team has been intentional and focused on driving the meaningful contribution towards the advancement of women leaders within the Financial Services Sector.
AWIF’s mission is anchored on four key strategic pillars:
- Advocacy: to increase participation of women in key industry forums and promote gender diversity in the sector;
- Mentorship and skills development: to facilitate skills transfer through industry-specific academic programmes and leadership courses;
- Women-owned businesses: to be the bridge in creating partnerships and access for women lead businesses and skills development;
- Networking: to provide a platform for women to engage and foster meaningful change and collaboration.
Although 2021 has been a challenging year and many headwinds to face, the AWIF team has been determined to ensure change and making moves. We started off July by hosting our first book review themed: Overcoming Imposter Syndrome: Belonging, Inclusion and Development. The event was graced by two formidable authors, Ms Carice Anderson author of Intelligence isn’t Enough — a book that provides insights on leadership and development for black professionals and Ms Lindelwa Skenjana, author of The Black Girls Guide to Corporate South Africa which unpacks tools on how black women can navigate around their career journey in the corporate world.
In the same month, Chief Economist at Alexander Forbes, Mr Isaah Mhlanga, facilitated a Macroeconomic Outlook Session and engaged members on key economic issues following the recent impact by Covid-19 on monetary policy and government’s fiscal response to reforming the economy.
In joining celebrations of Women’s Month, AWIF hosted a successful Women’s Day Event on mental health and career success. This event was graced by a panel of experts in the mental health space, such as Clinical Psychologist Dr Matthews Katjene, MD of Psychwell, practising attorney Ms Thuto Makuta and certified life coach Ms Tafadwa Makombe. The event was empowering as we learnt about how women can be agile and how we can practice self-care.
Every year we pay tribute to the more than 20 000 women who marched to the Union Buildings on 9 August 1956 in protest against the extension of Pass Laws to women. As part of continuing with commemorating women’s month, AWIF hosted its annual online women’s summit. This year, AWIF, with the significant assistance of our sponsors Old Mutual Investment Group and Aluwani Capital Partners, managed to host this annual event under the theme: “Women Leading through Change and Uncertainty: An Agile Executive.”
The event had a panel with powerhouses like Professor Mamokgethi Phakeng, Ms Busi Mabuza, Ms Yolanda Cuba, Ms Sinenhlanhla Dlamini and Ms Meta (Maponya) Mhlarhi, who heed the clarion call to empower women shared their pearls of wisdom and some poignant lessons with our members, Siyabonga Zimbokhodo…
As part of our commitment to continuous professional development for our members, we have partnered with one of the world’s largest asset managers — Franklin Templeton Investment, to train 20 black women in the sector on Investments. The investment training programme is an 8-course programme that is the first of its kind provided by Franklin Templeton Investment in conjunction with ABSIP.
For our mentoring programme, we had the honour and privilege to have a mentorship webinar on mentorship facilitated by renowned businesswomen and philanthropist Ms Amanda Dambuza. Ms Dambuza, who also its on a number of boards and has authored the book Baked in Pain, gave a very informative and engaging session on the relationship of mentorship.
There is still much more on offer for AWIF members and the whole AWIF community as planned by the AWIF team. In the meantime, look out for our upcoming events on all our social media platforms, and be sure to follow us on the following handles for some inspiring and topical #fempire content exclusively available on:
LinkedIn @ABSIP Women In Focus (AWIF)