NUM responds to Ubank being placed under curatorship

Mineworkers’ union insists Ubank complied with Sarb’s request for trustees to come up with R800m: NUM spokesperson Livhuwani Mammburu.

FIFI PETERS: We are going to follow up on the story of Ubank, which yesterday became the latest bank to be placed under curatorship here in South Africa since VBS underwent the same process in 2018, and African Bank in 2014. A curatorship is a protection procedure, and it’s something that gives the Prudential Authority the legal means to create the necessary space to implement a resolution plan. In Ubank’s case, the resolution plan will most likely address concerns around poor governance, weak internal controls, and the lack of sufficient capital to ensure the viability of the bank.

So a bit of history about Ubank. It’s been around for a very long time. It was created around four decades ago. When it was created, it was created to serve as a savings fund for mineworkers. It then converted to a commercial bank in the early nineties, and is now owned by a trust that is managed by the trustees elected by entities, including the National Union of Mineworkers and the Minerals Council of South Africa. That’s according to its website.

We have got Livhuwani Mammburu, the spokesperson of NUM on the Market Update for more. Livhuwani, thanks so much for your time. Am I correct about the ownership structure of the bank as presented on your website?

LIVHUWANI MAMMBURU: Yes, you are correct.

FIFI PETERS: So, following yesterday’s announcement, NUM’s general secretary, Makgabo William Mabapa, was quoted in the media as saying that the union was essentially shocked by this development of Ubank being placed under curatorship. Can you speak to that? Why did this decision from the South African Reserve Bank come as a shock?

LIVHUWANI MAMMBURU: Definitely it came as a shock because before they placed Ubank under creatorship we had a meeting with the Prudential Authority, where the Prudential Authority said that if NUM, if the trustees or the bank can raise R800 million, Ubank will not be placed under curatorship. Then indeed NUM, the Ubank board managed to raise the $800 million that was needed not to put Ubank under curatorship. So we were shocked yesterday in the afternoon when the Reserve Bank governor had an emergency media conference, saying that Ubank is going to be placed under curatorship.

For us it was a shock because there were negotiations behind the scenes, and the Prudential Authority had been given tangible evidence that indeed there is capital, there is money that is going to address the issue 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 place Ubank under curatorship.

FIFI PETERS: So let’s circle back to the R800 million that the Prudential Authority said that you had to raise as Ubank, which you did. I have read that you were given 24 hours to do so, so a day – is that correct?

LIVHUWANI MAMMBURU: Yeah, definitely. And then it was raised.

FIFI PETERS: All right. Why was there a need to raise R800 million in 24 hours in the first place?

LIVHUWANI MAMMBURU: I don’t know. That’s what the Prudential Authority demanded [that we] do. And then we did that.

FIFI PETERS: And where did you raise the money from?

LIVHUWANI MAMMBURU: At the moment we can’t reveal that, because there have been negotiations behind the scenes. The Prudential Authority knows, or they have been given tangible evidence and the Reserve Bank knows that there is money available. So, like you said, our general secretary was shocked to find out that Ubank had been placed under curatorship, even though the issue of capital adequacy has been addressed. And if I have to further comment, we don’t know, we are shocked because we don’t know whose agenda is being served now after placing the bank under curatorship, when the issue of capital adequacy, which was the main issue, was addressed.

FIFI PETERS: Yesterday the nation learned about this from the emergency announcement that was made by the governor, the emergency meeting that was convened. But you have indicated that a lot was happening behind the scenes. How long has this buildup been coming? When did talks begin? When did the Prudential Authority start raising concerns about what was happening at Ubank?

LIVHUWANI MAMMBURU: I’m not sure of that, to be honest. But I know that the NUM has been addressing the issue of capital adequacy for some time, and it has assured the Prudential Authority and the Reserve Bank that the issue of capital adequacy is being addressed. And indeed, the issue of capital adequacy has been addressed. So that is why, as the NUM, we are saying that we are extremely shocked that now Ubank has been placed under curatorship when the main concern has been addressed.

FIFI PETERS: The main concern, maybe, but there were other concerns also. The Reserve Bank governor raised concerns around poor governance at the bank, raised concerns about weak internal control. So what’s NUM’s position on that, and particularly the fact that you, like the Minerals Council of South Africa, have elected individuals to represent your interest. What is your response to the fact that there are accusations of poor governance and weak controls? And what have you said to the representatives representing NUM on Ubank’s board?

LIVHUWANI MAMMBURU: You know what, I’ll be honest with you and call a spade a spade. There’s a lot happening behind the scenes that we can’t reveal here in the media at the moment. There’s a lot, to be honest. Then some people are not telling the truth and that is why we are [asking] whose agenda the Reserve Bank is serving. You understand? We understand the issue of corporate governance and the lack of internal controls.

I spoke to the trustees who represent many in there. They never mentioned the issue of corporate governance and the issue of lack of controls. They spoke about the issue of capital advocacy that they addressed, the issue of corporate governance and lack of internal controls. We are not aware, as the NUM, because I spoke to the trustees who represent NUM there at Ubank.

FIFI PETERS: Whose agenda do you think is being –

LIVHUWANI MAMMBURU: Honestly speaking, I can’t speak about it, but there’s a lot happening beyond the scenes. We will reveal this when it’s the right time. But at the moment we can’t reveal it, but there’s a lot going on behind the scenes and [for] the Reserve Bank to put Ubank under curatorship, they must be serving somebody’s agenda. Understand, it’s very disturbing to be honest.

FIFI PETERS: Well, we look forward to hearing more from you when the behind-the-scenes action is brought forward into the public.

Livhuwani, thanks so much for your time. I’ll leave it there. Livhuwani Mammburu is the spokesperson of NUM.



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Typical NUM — All the bluster and denials but the truth will out — I think this bunch is bankrupt !!!!!

End of comments.



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