South Africa's Land Bank out of trouble

Started by sajiv, Aug 19, 2009, 10:48 PM

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sajiv

South Africa's Land Bank out of trouble

Midrand (South Africa), Aug 18 (IANS) South Africa's troubled Land Bank has effectively managed to steer clear its financial woes with the government help, BuaNews reported citing Finance Minister Pravin Gordhan.

The government had taken control of the management last year after alleged misuse of funds by senior officials of the bank.

Four audits have since been commissioned. The findings of the investigation were submitted to the Serious Economic Offences Unit of the South African Police.

'I understand the Bank is now out of ICU (intensive care unit) but they will still have to convince all of us that they will get out of hospital as soon as possible,' Gordhan said Monday.

'I am confident the new management team, under the direction of the Board, will charter the bank safely through the challenges that lie ahead,' the minister said at the launch of the bank's annual results.

He said he was keeping a close eye on the investigation into what went wrong at the Land Bank. 'We will leave no stone unturned in order to uncover the complexity of the web and the financial machinations that went into developing these fraudulent schemes.'

The minister said the bank is performing better now.

He, however, said many challenges remain and continue to put pressure on the liquidity of the bank.

'There have been moratoriums and I will not deal with those in detail. The policy of the bank has to ensure its own sustainability,' he said.

He said farmers, who did not repay money owed to the bank, impacted negatively on it, making it suffer liquidity problems.

He added that he had approved the recapitalisation of the Land Bank through an increased guarantee of 3.5 billion South African rand (about $435 million).

'These steps will ensure that the Land Bank is financially sustainable, and will be viable to promote effective economic development in rural areas,' he said.


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