The former South African president Thabo Mbeki was heavily blasted over series of isolated accusations during his administration. A lifeboat is financial assistance from a central bank to a distressed commercial bank.

Public protector Busi Mkhwebane is not impressed by the reasons provided by former president Thabo Mbeki for his administration’s failure to act on the report detailing the misappropriation of public funds to bail out Absa.

“President Mbeki did not provide cogent reasons as to why the South African government did not implement the CIEX report,” reads Mkhwebane’s report into her investigation of the R1.5-billion the Reserve Bank gave to Bankorp and Absa as a lifeboat between 1985 and 1995.

In her report, Mkhwebane said the lifeboat advanced to Bankorp/Absa was a gift not sanctioned by any legal framework and further that the gift was misappropriated public funds. She described the lifeboat as an illegal gift in the guise of a loan and that Absa benefitted from financial assistance that was irregular.

CIEX is a UK-based asset recovery agency that was contracted by the government to investigate and recover misappropriated public funds and assets allegedly committed during apartheid .

The government agreed to pay CIEX 10% of the first recovered $100-million as commission. The company would get 7.5% of the money subsequently recovered, according to the agreement.

At the time of CIEX investigation, between August 1997 and December 1999, the rand-dollar exchange rate was between R4.61 and R6.95.

CIEX was paid £600000 (about R10-million) for the investigation.

During the investigation, Mkhwebane and her predecessor interviewed Mbeki, director-general during his presidency Frank Chikane and former finance minister Trevor Manuel, among others.

Mbeki told Madonsela in May last year that CIEX, the company whose report was the basis of Paul Hoffman’s complaint, did not recover the money it had been hired to recoup.

As a result, Mbeki said, a decision was taken to terminate CIEX’s contract due to its failure to recover public funds.

In the report, Mkhwebane said the National Treasury told her office that the “shock of adjusting to international anti-apartheid sanctions and the government’s total strategy against anti-apartheid was a material factor that swayed the granting by the Reserve Bank of financial assistance to Bankorp/Absa”.