Fifi Peters: We are going to follow the story of Ubank, which yesterday became the last bank under curatorship in South Africa since VBS went through the same process in 2018 and African Bank in 2014. A curatorship is a protection mechanism, and it is something that gives the Prudential Authority the legal means to create the necessary space for the implementation of a resolution plan. In the case of Ubank, the resolution plan is likely to address concerns about poor governance, weak internal controls, and a lack of sufficient capital to ensure the bank’s effectiveness.
So a bit of history about Ubank. It has been around for a very long time. It was created almost four decades ago. When it was created, it was created to serve as a savings fund for miners. It was transformed into a commercial bank in the early 1990’s and is now owned by a trust run by trustees elected by entities including the National Union of Mineworkers and the Minerals Council of South Africa. That’s according to his website.
We got NUM spokesperson Livhuwani Mammburu in the market update for more. Livuwani, thank you so much for your time. Am I right about the ownership structure of the bank presented on your website?
Livonian members: Yes you are right.
Fifi Peters: So, following yesterday’s announcement, NUM’s general secretary, McGabo William Mbapa, was quoted in the media as saying that the union was “shocked” by the fact that Ubank’s development had been put under curatorship. Can you talk about that? Why was the decision of the Reserve Bank of South Africa shocked?
Livonian members: Of course it came as a shock because before they placed Ubank under the Creator we had a meeting with the Prudential Authority, where the Prudential Authority stated that if NUM, if the trustee or bank could raise R800 million, Ubank would not be placed under curatorship. Then, in fact, NUM, the Ubank board was able to raise $ 800 million, which was necessary to keep Ubank from being curated. So we were shocked yesterday afternoon when the Governor of the Reserve Bank held an emergency media conference, saying that Ubank would be placed under curatorship.
For us, it was a shock because behind-the-scenes discussions took place, and the Prudential authorities were given real evidence that there was indeed capital, money that was going to solve the problem of capital adequacy. But for us, it came as a shock, to be honest, and we don’t know why the Reserve Bank decided to keep Ubank under curatorship.
Fifi Peters: So let’s go back to the R800 million that the Prudential authorities said you should raise as Ubank, which you did. I read that you were given 24 hours to do this, so one day – is that correct?
Livonian members: Yes, of course. And is then raised.
Fifi Peters: All right. Why was it necessary to collect R800 million in 24 hours in the first place?
Livonian members: I don’t know, that’s what the Prudential authorities have claimed [that we] And then we do that.
Fifi Peters: And where did you raise money?
Livonian members: At the moment we are not able to reveal that, because there has been discussion behind the scenes. The Prudential Authority knows, or has been given clear evidence, and the Reserve Bank knows that the money is being received. So, as you said, our General Secretary was shocked to learn that Ubank has been placed under curatorship, although the issue of adequacy of capital has been resolved. And if I have to comment further, we don’t know, we’re shocked because we don’t know whose agenda is being served now that the bank has been placed under curatorship, when the main issue was capital adequacy.
Fifi Peters: Yesterday, the nation came to know about the emergency announcement of the governor, which was called an emergency meeting. But you have hinted that a lot is happening behind the scenes. How long has this buildup been coming? When did the discussion start? When did the Prudential authorities begin to express concern about what was happening at Ubank?
Livonian members: I’m not sure, to be honest. But I know that NUM has been addressing the issue of capital adequacy for some time, and it has reassured the Prudential Authority and the Reserve Bank that the issue of capital adequacy is being addressed. And indeed, capital adequacy is an issue There is Has been addressed. For this reason, as NUM, we are saying that we are deeply saddened that Ubank has now been placed under curatorship while the original concerns have been addressed.
Fifi Peters: The main concern, may be, but there were other concerns as well. The governor of the Reserve Bank has expressed concern over the weak governance of the bank, expressing concern over weak internal controls. So what is the position of NUM in this matter, and especially true that you, like the Mineral Council of South Africa, have chosen individuals to represent your interests. What is your reaction to the allegations of poor governance and poor control? And what did you say to the representatives representing NUM on Ubank’s board?
Livonian members: You know, I’ll be honest with you and call a spade a spade. There is a lot going on behind the scenes that we are not able to reveal in the media at the moment. There are many, to be honest. Then some people are not telling the truth and so are we [asking] Whose agenda is being served by the Reserve Bank. Do you understand We understand the problems of corporate governance and the lack of internal control.
I have spoken to the trustees who represent many there. They never mentioned the lack of corporate governance and control. They talked about the problems of capital advocacy that they addressed, the problems of corporate governance and the lack of internal control. We are not aware of NUM as I have spoken to the trustees representing NUM on Ubank.
Fifi Peters: Whose agenda do you think is –
Livonian members: Honestly, I can’t say much about it, but there’s a lot going on outside of the scene. We will publish it when the time is right. But at the moment we can’t reveal it, but there is a lot going on behind the scenes [for] The Reserve Bank will put UBank under the curatorship, they must be serving someone’s agenda. Understand, it’s very annoying to be honest.
Fifi Peters: Okay, we’re looking forward to hearing more from you as the behind-the-scenes action unfolds.
Livuwani, thank you so much for your time. I’ll leave it there. Spokesperson for Livuwani Mamburu NUM.