The Heath Report: "Heath Special Investigating Unit investigation into the financial aid package to Bankorp/Absa."
What is it?
The Heath Special Investigating Unit, headed by Judge Willem Heath, was instructed by government in 1999 to investigate the Bankorp/Absa deal with the South African Reserve Bank (SARB). He reported back the same year.
What does it say?
The report is unavailable and has never been made public. The Davis panel was denied access to the report, while Absa also has never seen the full document. The report also isn't available on the Special Investigating Unit's website. The principle findings of the report were released via a statement in November 1999: even though Absa (who bought Bankorp) and Sanlam (the principle shareholder in Bankorp) could be held liable, any court challenge would be ill-advised because of the possible risk to the South African banking sector.
Did the SARB loan money to Bankorp/Absa or was it a donation?
It was a donation, Heath found. The SARB had no authority to extend a lifeboat to Bankorp/Absa and the loan agreement between the parties was faulty.
How much money is involved?
Heath said a total package of R1.5 billion was "donated" to Bankorp, with interest on the capital amount of 1% per annum. Bankorp had to reinvest a part of the loan in government bonds which produced a yield of 16% annually. The total dividends amounted to R1.125 billion.
Were the monies paid back?
Yes, Heath found, even though there was no stipulation in the original agreement that it should be paid back. Absa paid the SARB R1.5 billion in 1995.
Sources: Beeld, Business Day, Mail & Guardian.