Johannesburg - A former African Bank executive, Tami Sokutu, has turned his back on those drowning in debt due to easy loans from the bank.
According to the Sunday Times Sokutu, who made over R50m in share options and earned another R35m in salary and bonuses while he was Abil’s chief risk officer, showed no sign of remorse for the reckless lending to millions of South African’s who could not afford to repay their debt. This, say analysts, has led to the collapse of the bank.
During his interview with the newspaper he reportedly boasted about having made millions and said he was now globetrotting.
Sokutu reportedly owns three houses in South Africa and another in Portugal.
He said he did not need to ever work again and according to him he also owns six luxury cars, including a Porsche and a Bentley.
He said he lived a lavish lifestyle and had no regrets and blamed borrowers for their predicament and said they should not have applied for loans if they were not able to repay them.
Sokutu, a former director-general of the department of public works, was sacked last year as South African Biodiversity Institute chairperson after arriving drunk at the Chelsea Flower Show in London where he was meant to be welcoming guests.
South African Reserve Bank governor Gill Marcus last Sunday announced that African Bank had been placed under curatorship.
She said a consortium involving major banks had committed to underwrite a R10bn capital raising and would engage with shareholders and other participants.
The consortium comprises Absa, Capitec, FirstRand, Investec, Nedbank, Standard Bank and the Public Investment Corporation.
African Bank's shares plummeted recently after it warned of massive losses and said it needed about R8.5bn in new capital.
Marcus said African Bank served 3.2 million people.
The Debt Counselling Industry said on Monday the NCR should be probed for not properly investigating African Bank.
"Over the past few years, debt counsellors have lodged thousands of complaints, many relating to reckless lending... against the country's major credit providers, including African Bank," founder Deborah Solomon said in a statement at the time, according to Sapa.
"These complaints have repeatedly been sent to the regulator who has chosen to ignore them and the plight of desperate consumers."
However, Motshegare said the NCR conducted an investigation into the bank's lending practices and their impact on consumers last year.
"We investigated the bank last year for reckless lending and entered into a settlement agreement in terms of which the bank paid R20m."
Motshegare said the bank's unsecured lending had declined in 2012, after the regulator "expressed concern" about it in 2011.
However, she admitted that the bank's recent growth in impairments and bad debts "went a lot further than expected".
Motshegare said the NCR would engage the curator of African Bank to ensure the bank's clients were served in a manner that met the terms of the National Credit Act.
The regulator would also continue to work alongside the Sarb to ensure that the bank's lending practices were "sound and fair".