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Business Times reports that trustees of troubled Ubank, which is under Reserve Bank curatorship, have expressed deep dissatisfaction with the decision to sell a majority stake to African Bank for R80m.
Ubank was placed under curatorship in May after its capital adequacy ratio fell to about 3%. Zola Beseti of KPMG was appointed the bank’s curator. Mineworkers have a stake in the bank via the National Union of Mineworkers (NUM), which represents them through the Teba Trust Fund. African Bank announced last week that it would buy a majority stake in Ubank’s disclosed assets and liabilities for R80m and take on the lender’s employees and depositors. But a source close to Ubank said it was unfair and uncompetitive for the curator to name African Bank as the successful bidder. “African Bank and Ubank are doing the same thing. They operate close to each other ... where there is African Bank there is a Ubank branch in front. If you are doing the same thing, then obviously you are going to retrench,” he said in reference to the future of the bank’s 700 employees. Teba Trust Fund chair and former NUM president Joseph Montisetse said they were unhappy with the acquisition and had agreed to appoint a financial expert to look into the matter before they decided on a way forward. He said the trustees did not understand how African Bank could acquire Ubank for just R80m when it was worth more than R4bn. The trustees further wanted clarity on what the acquisition means for depositors’ money. NUM deputy general secretary Mpho Phakedi said the trustees would also engage African Bank over the acquisition. The Minerals Council SA (previously called the Chamber of Mines), which jointly administers the Teba Trust Fund with the NUM, said it had a meeting with the curator last Friday to update the trust on the choice of African Bank and the trust would convene a board meeting to deliberate on the matter and then pronounce its views on the transaction.
- Read the full original of the report in the above regard by Dineo Faku at BusinessLive (subscriber access only)
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