Absa, one of South Africa’s biggest banks, turned a blind eye to money laundering. That’s abundantly clear from the evidence Forensics for Justice founder Paul O’Sullivan has pieced together. Absa is hiding behind technicalities to avoid explaining its role in state capture and corruption at Eskom, which is the state entity that is the most troublesome for South Africa and the one which is arguably the biggest obstacle to improving economic growth. Absa has been relatively unaffected by state capture, with its annual profits looking robust. In this interview with BizNews founder Alec Hogg, O’Sullivan explains how an Eskom employee withdrew an average of R2m a month and on some days several millions in cash from Absa. And the bank employees at the very least turned a blind eye, though most likely were in kahoots with Eskom state capture specialists. O’Sullivan has a reputation for nailing major crooks, including ensuring that corrupt former police chief Jackie Selebi was put behind bars. So far, Absa has made light of its role in corruption at Eskom, choosing to hide behind client confidentiality. – Jackie Cameron
How Absa laundered Eskom funds: in a nutshell
By Thulasizwe Sithole
Paul O’Sullivan, the force behind Forensics for Justice, a non-profit organisation that identified that the criminal justice system had been captured by criminals, has joined the dots between corruption at Eskom and Absa – one of South Africa’s biggest banks.
The role of Absa in helping dirty Eskom employees is so simple it entailed nothing more than Absa employees converting money siphoned from the power utility into cash. And, what’s particularly astonishing is the amounts involved, with more than R5m being withdrawn in one day alone.
But, as O’Sullivan points out, Absa is not prepared to be accountable for the activities of its employees. Instead, it claims it has reported the matter to the authorities and cannot comment about it because of client confidentiality.
Speaking to BizNews founder Alec Hogg, O’Sullivan says: “It would appear that banks like hiding behind the confidentiality story. They claim their clients are entitled to confidentiality but we don’t believe they are if they broke the law.”
In this podcast O’Sullivan picks up on the fact that banks require individuals to regularly submit paperwork proving identity, addresses and other information related to anti-money-laundering legislation and they are also expected to ask customers questions about the source of funds for large figures.
Yet, no-one at Absa appeared to bat an eyelid as an Eskom employee who had a sideline closed corporation started receiving millions into his bank account and withdrew it in cash almost as quickly as the funds registered.
“Absa must have known there was money laundering from the outset,” says O’Sullivan.
“The teller must have been in on it. You can’t have someone coming in continuously to withdraw money,” notes Hogg.
“Which bank would allow someone to withdraw more than R5m and come back a few days later for a few more million? If you used R200 notes, you’d need two suitcases to carry this money,” continues O’Sullivan.
What has the bank done about it? O’Sullivan explains how banks stonewall when there are dodgy transactions and allow theft to take place.
“They allow billions a year to be stolen and that comes off their bottom line. Yet, Absa is able to bank R16.1bn,” adds O’Sullivan, in this podcast, which is essential listening for everyone following the trail of money in South Africa’s state capture scandal.