Private Sector needs a strong Private Protector
While the unravelling of the African Bank is nothing palatable for anyone, it would be interesting to see the end results of its unravelling. Billions in shareholder value has been wiped off already and, by this time next week, the company could just be a shell with no value except a 'bad book' of non-performing loans (NPL).
Ironically, while the public sector has an effective (and lauded) PUBLIC PROTECTOR to investigate and recommend remedial actions on maladministration and corruption activities, the PRIVATE SECTOR, especially the financial services industry, has the toothless FSB and the ineffectual Reserve Bank as a counter-measure.
What does this mean for the average Joe Soap who has invested his/her life savings on the stock on the proviso that the bank had an effective, competent and skilled management team on board to help grow their value and increase their wealth?
What does this mean for the institutional investors who, on behalf of government employees schemes, private investors and others, invested and were duped by the promise of a return to normalcy by Leon and team?
I read an interesting piece by David Shapiro, of SASFIN, last week on The Times Online about the treachery that seem to be lurking in the horizon. What struck me about his piece (and on African Bank) was that he dumped the stock at the first sign of difficulty because 'cockroaches never hang alone in the kitchen', the rot must be systemic, deep and have been sustained for much longer than we are aware.
Indeed, it proved to be so also for Brett Kebble (thank you Barry Sergeant with your wonderful journalism on him).
My suspicions is that Leon Kirkinis (who resigned with immediate effect on Tuesday, 05 August 2014) team will probably get off with light slaps on the wrist (for having wiped off billions of shareholder value through reckless and potentially fraudulent practices) only to emerge again, soon, to loot more shareholders' money.
They say 'a sucker is born every minute', I tend to agree, especially in the private sector. Gullible and avaricious investors will be sucked into another ponzi scheme (like the R699-own-a-car one) at the prospect of investing little and reaping in bountifulls.
Equally strange is that the usual howlers, i.e. the media, opposition parties, etc, will continue covering this up (with a small clipping here and another there) for fear of upsetting their masters...but soon, the centre will not hold and THINGS WILL FALL APART.
*Tshepo is the Editor-in-Chief at YBS Media (www.ybsmedia.co.za)