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NCR accused of siding with banks in R60bn class action suit

By demanding the return of confidential information that purports to prove the claim that banks have been selling foreclosed properties for a song.
The NCR says accusations that it is a captured institution are ‘inflammatory’. Image: Mike Hutchings, Reuters

The National Credit Regulator (NCR) is accused of siding with the banks in a massive R60 billion class action suit brought by the Lungelo Lethu Human Rights Foundation after it demanded the return of documents that purport to show perjury by the banks and a pattern of selling foreclosed houses for a song.

In a side case to the class action suit, the NCR has applied to the Gauteng High Court to interdict Advocate Douglas Shaw, statistician Garth Zietsman and some 200 others involved in the case from disclosing confidential information obtained while Shaw and Zietsman were doing work for the NCR.

Moneyweb previously reported on the story:

The NCR is asking the court for an order demanding the return of any and all NCR documents, statistics and other information obtained by Shaw and Zietsman, including annexures filed by Zietsman in support of the class action suit.

The NCR says it is bound by the provisions of the National Credit Act, which obliges it to keep information confidential and to ensure that it is used for the purpose for which it was intended. Failure to return the confidential information could result in harm to the customers and banks, and could create a liability on the part of the NCR.

“This is tantamount to the police investigating a murder and finding the murder weapon and the culprit, only to be told to hand over all evidence to the culprit,” says Shaw.

“We have evidence the banks have been selling properties at a fraction of their market worth and they have been lying about it for years before the courts.

“The real harm that has been done here is to the banks’ customers whose properties have been repossessed.

“This is a national scandal and a disgrace, and we look forward to arguing this in court.”

The information obtained by Shaw and Zietsman shows repossessed properties have been sold for 50-60% of their market value through sheriffs’ auctions around the country.

Alarm bell sounded years ago

The NCR says the information was obtained in 2015 while conducting an audit and compliance check. Shaw was brought in as legal counsel, and Zeitsman as statistician.

Shaw recommended instituting legal action against certain banks (for unlawfully selling repossessed properties at below market price).

The NCR decided against pursuing legal action against the banks as the Rules Board for Courts of Law was reviewing the rules applicable to the sale in execution of repossessed properties. The Rules Board has subsequently changed the court rules to allow judges to set a reserve or floor price when granting a sale in execution order.

In his answering affidavit to the NCR, Zietsman says the court should not grant the NCR the order it is requesting because “the basic test for whether a document should be submitted is relevance and the documents are very relevant”.

He adds: “[Zietsman’s founding] affidavit reveals that the banks have been perjuring the court in this matter by pretending (a) they had no awareness that they had sold thousands of properties for much less than value and (b) that they have no methods of valuing the market value of a property which in their papers they deny. These are highly material and relevant matters.”

NCR ‘a captured institution’

Zietsman goes on to say the documents the NCR wants returned are in any event public documents available through the Deeds Registry.

“The mandate of the NCR is to protect consumers against behaviour of credit providers that is unlawful and/or unconstitutional. In this application it acts as a defender of the banks against the consumer and has therefore failed in its mandate and it is submitted that it is a captured institution and that this should be investigated by a high level commission for regulatory capture.”

There is an aspect to the demand that is absurd, adds Zietsman, in that the NCR purports to protect those named in the database – the very same people who stand to receive large amounts of money should the class action succeed.

A person cannot rightfully be ‘protected’ against their own clear interest, he argues.

Zietsman says the annexures attached to his affidavit have blanked out the names of the parties and cannot therefore be claimed to violate confidentiality. He nevertheless is asking the court to allow the original database, with full names disclosed, to be restored.

“Whatever may be said about whether the NCR is entitled to its statistics back, it certainly cannot be said that it is entitled to my affidavit which is my opinion which I have never been paid for and thus remains my confidential information and I choose to share with the applicants in this matter, and thus this court,” he deposes.


In response to questions sent to it by Moneyweb, the NCR replies that Zietsman’s claim that the NCR is a captured institution that has failed in its mandate to serve consumers is inflammatory.

[These] accusations are indeed inflammatory and unjustified. It is unethical and unlawful for Adv Shaw and Mr Zietsman to use the information they obtained from the NCR for their own litigation. This information is protected from unlawful disclosure by the National Credit Act (sections 68(1) and 156(1)) and the Protection of Personal Information Act.

Sales in execution of immovable property [houses] are governed by the Uniform Rules of Court administered by the Department of Justice and the Rules Board for Courts of Law. In particular, Rule 46 of the Uniform Rules of Court. In a series of judgments, the National Consumer Tribunal has ruled that it has no jurisdiction to review sales in execution of immovable property.

The NCR made oral and written submissions to the Rules Board during their consultation meetings on changes to Rule 46. This consultation process resulted in changes to the Rule to offer more protection to consumers during sales in execution of their residential immovable properties. The changes include the court setting a reserve price for sales in execution.

Their claim that the NCR is captured is scurrilous and strongly denied.

Shaw and the Lungelo Lethu Human Rights Foundation have further argued that the NCR should join the class action as amicus curiae (friend of the court) in defence of consumers whose properties were repossessed at a fraction of market worth, rather than seeking – as is claimed – to run air cover for the mortgage banks by seeking to recall crucial evidence that will assist in proving wrongdoing.

The NCR replies:

The NCR is cited as a party to the class action and will determine at the appropriate time the submissions it wishes to make to the court.

Their claim that the NCR is protecting banks is also scurrilous and strongly denied.



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These kind of underhanded tactics by banks are caused by the economic principle that residential property is considered an asset!

This false thinking also caused the global financial crisis in 2008 and the Evergrande debacle playing out in China currently.

Berlin on 26 September voted 57% to 39% to nationalize all residential property. This happened in Germany!

Every South African is entitled to a home. But we have millions that are living in informal settlements or are homeless.

South Africa should :
-only allow one residential property per family
-no registrations of residential property under a trust/company.
– No sales of residential property above the municipal valuation.

This will eliminate speculation in our residential property market and allow everyone a right to a home.

Investing should not be about making money out of a families need to live in safe place. If you want to invest in something, invest in local and international shares.


Kill the property market. Clever. Not many “invest” in property in SA any longer anyway. A bit behind the curve. The anc has done that already.

Where do all the undocumented millions of illegal aliens live? In houses or informal settlements? Hence the pittance available for “grants”. “the people” are paying for the brothers and sisters. The billions lost in property values are paid for. It has a cost. Paid for by “the same people”

Strange how some think someone else is paying????

The last time Germany elected to abandon property rights was in 1933, when Hitler led the NAZIs into power. The EFF wants to emulate this oppressive and destructive regime. Property rights form the foundation of taxation in South Africa.

Any infringements on property rights will kill at least 20 million of the poorest people when the banking system implodes, followed by famine and disease.

Either you did not think your comment through, or you are evil to the bone. Ignorant, naive, or evil.

Sieg Heil EFF !!!

Berlin (Capital city of Germany) had a referendum on Sunday 26 September (2 days ago) on whether to nationalize residential property. It passed 57% to 39%. Residential property is a human right not an investment.

@EFF not even sure why I am bothering with this given your handle, but here goes…

If human right is a metric to go by then no one should be able to invest in companies (shares as you put it) that produce clothing, food, education, energy, etc. I would recommend thinking about the policies you adopt as your own when you do not have the capability to create your own. Lowest common denominator is not a policy it is suicide.

I am only replying to this ridiculous comment not for mockery of a this person’s woefully misunderstood reason for ownership of private property but also to allow to better understand and in future research why private property creates prosperity for all.

Why Private Property is Important:
Property is an Asset just like money is whilst the one is more liquid than the other. Making an Asset public property amounts to theft as someone had to spend their attained resources (Skills, Knowledge, Time, Physical Labour) to create it, then they attained an asset to preserve their value in different forms.

Private ownership allows for individuals to further attain and preserve their resources for reinvestment, growth and self reliance Whilst public ownership hinders further development of a said asset and is many cases deterioration of the asset occurs this can be seen in almost all of the public roads, public parks and public land.

The simple question is why would an individual reinvest their earnings in an investment which they are no longer the owners of? The simple answer is that they will not and rather they would pursue countries that allow for the ownership and protection of private poverty.

Contrary to your belief, governments around the world do complete for people to invest, whilst we do a have world of mixed economic categories those which are Supportive of Private Property and Protective of Private Property tend to have higher inflows of money.

EFFluent drivel : No more need be added.

I think you meant to say ‘no sales of residential properties BELOW the municipal valuation’…? If that is so, then I will agree with you..


Your policies are self fulfilling. If the EFF takes over no property will be an investment

SA is hardly in a property bubble, it is not a speculators paradise. There is over investment in property and for buyers and renters it has never been so good.

Investors who are still able to squeeze a profit are hounded by SARS. Classic lose-lose situation for SA Inc.

The hotline for idiots anonymous number has change — Google the new one !!

Now now, let’s not be disingenuous here.

The Berlin vote was in relation to apartments owned by the big landlord companies only (if they own more than 3000 rental units).

The social democrat party similarly confirmed that the advisory referendum will not create new apartments or solve the wider housing issue.

It is also not an issue of expropriation without compensation, so the cost in achieving this could better be used in funding other housing projects.

As is the norm here in SA, you would rather take than create.

From Bloomberg regarding the non-binding referendum: “The proposal applies to property companies that own more than 3,000 rental units. Deutsche Wohnen said it doesn’t expect that expropriation of flats will happen, and that such a move would be unconstitutional.

The vote coincided with elections for Berlin’s city government, in which the Social Democrats pulled ahead of the Greens — meaning they’ll get a chance to appoint the next mayor. The party’s candidate, Franziska Giffey, said while the outcome of the referendum must be respected, expropriation won’t create new apartments or solve the wider housing issue.”

So, in other words, it’s a meaningless referendum, rather like asking people whether the government should hand out cash every Friday for free.

It’s not meaningless. When 57% of voters are in favour of something, the politicians listen. Especially in a voting system like Germany’s.

Remember Germany will most likely result in a traffic light coalition consisting of SPD (26%), Greens(15%) and FDP (12%). This means that Olaf Scholtz becomes Chancellor having only gotten 26% of the vote!

Politicians tend to give the voters what they want and Germans want to nationalize residential property. They will change the constitution if needs be.

@EFF How can you bring one city thats Socialist Hot again with a population of 3 mill into the debate to argue that that is the general consensus in Germany, or for that matter the West..

Your mind set is telling

If you are so convinced that a referendum is the gauge, why then won’t this Government call for a referendum in the W Cape? We all know why, do you?

And do us all a favour before you and all your friends “thumbs down” every comment

Engage your brain before accelerating your finger!

@EFF Incidentally, Berlin is a City, not a country

Berlin is a magnet for high tech industries. Like all major centers where innovation and prosperity are in good supply there are housing shortage problems. We see this to a lesser extent in Capetown as well.

In these places there is a political backlash from those lower down the food chain who cannot afford to purchase property and face rising rentals. Luckily in Germany these people are a minority and will never be able to force abandoning of property rights.

86% of Berlin residents rent their homes. This is similar to SA, where the majority are not home owners.

LESS RED TAPE leads to better economic benefits. And here you want to INCREASE the already high red tape the country is already burdened with.

The socialist left EFF is incapable of creating an economic boom. The only ‘boom’ the EFF is capable of… the boom of the IMPLODING kind!

…en dan sit ons almal onder ‘n ‘boom’. Pun intended.

You should seriously consider living in Cuba- 1 size fits all?


If you want to go by Berlin at least set the context correctly. The referendum was about buying out properties from specific large landlords. There is a mile between that and nationalizing all homes.

But I suspect you are looking to stir, so well done on pot well stirred 😉

Mea Culpa and all that. I made some foolish decisions and paid the price but I was a victim of this practice 30 years ago. Why is it only “news” now?

Interestingly, NO COMPLAINTS received to date from those new buyers (who purchased those repo properties ‘for a song’).

No hands raised? All happy? Good.

Well done to Shaw and Zietsman for taking on the NCR and Banks!
They should be commended and supported by all South Africans.

Moneyweb – please keep reporting on this case and let us know how we can support these courageous individuals.

About the article – It’s high time that big institutions in S.A. that clearly disrespect their customers, financially rape their customers and have less ethics than a politician, be exposed and punished for their deplorable recurring crimes. I trust the claimants in this case will stick to their guns and drive this case to its ultimate finality and a successful result.

Here’s what people still don’t understand about “regulators”

Industries effectively regulate themselves. The major players in the industry agree on a certain way that things will work and the regulator checks that everyone in the industry conforms to that.

If 2 out of 10 step out of line then the regulator will do what is neccessary to pull them back in line.

If 9 out of 10 are out of line then nothing will be done and the regulator will be seen as “siding” with the industry players.

In the long run, the customers are always shafted.

LOL — The NCR also has an overdraft to protect !!!

I hear you, but this a court case and not a regulator decision. The regulator for now sides with the banks trying to protect its own interest because the banks fund the operations of the regulator. But this all means nothing if this case is fought in the highest courts of S.A. My bet is on the claimants to succeed.

The NRC is broke. They dont have the money or the resources to take on big banks and big firms. Just settle out of court that is all you good for. Loosers.

I purchased properties via sale in execution on Sheriffs auctions for over 20 years.

What this article, and Advocate Shaw have ignored is that the auction bidder has to pay all the amounts outstanding to both the municipality plus the body corporate for rates, levies, water, electricity, refuse removal and sanitation charges IN ADDITION TO THE PURCHASE PRICE.

These amounts are often substantial – and when added to the price bid for the property often are close to, or even exceed the value of the property.

The buyer has to buy “sight unseen” and then has to evict the occupants which is an expensive and long process, and then undertake maintenance and repairs of a property which in the majority of cases have had no maintenance done for years, or are deliberately vandalised by the previous owner as an act of spite.

In the majority of cases I discovered that the “owner” obtained a bank loan and rented out the property, collecting the rental but not paying the home loan or any other expenses.

Its exceptionally rate for a primary home to be repossessed by the bank as the banks offer so many incentives to owners who are having financial difficulties – and who work with the bank to find solutions.

Since rule 46 of the high court was amended to require a minimum reserve price, which does NOT take into consideration the huge amounts owed to other creditors, the number of houses sold via sale in execution has plumetted as bidders are not willing to pay market related price for a run down property that they are going to have to spend tens or hundreds of thousands of rands to renovate after they have spent thousands of rands on legal fees to evict the occupants.

It is for comments like your’s that I read Moneyweb.

Agree Sensei. I acted for a Bank foreclosing on properties and can confirm what linsam states. We used to buy back some properties for the Bank, for the minimum bid, and transfer the property to the Bank where it became a P O P for sale. This Bank, if they sold at a “profit”, would credit the client with the profit even though they did not have to in law. So I can attest to one Bank acting ethically. There are two side to every story.

The banks are obviously very good litigators and get a fair shake in the courts. My experience is that there are some nasty people around who know how to play the legal system while preying on body corporates by being habitual levy defaulters. It is virtually impossible for body corporates to obtain a sale in execution order against such individuals. This can take 10 years or more when it is done.

A bonded propert is not your property until fully paid,its called hire purchase in other part of the world, in other word you are hiring until fully paid, if not the lender has the right to reposses their property, and sell it at any price demmed fit,no one talk about how many property bank sold at loss

The significance of false liquidations in the liquidation industry has profound implications that extend way beyond the significance of any personal grievances that the class action suitors might have. As this is a form of court capture (which the purpose of misleading courts is) that has become an international organised crime method of money laundering and tax evasion under the guise of court sanction, as SARS can confirm. To the extent that a matter is now before the FSCA potentially threatens the PIC GEPF ZAR Two Trillion pension fund. Attracting the attention of market short sellers internationally, about to be tested in the FSCA vs Viceroy ZAR 50 million fine- dwarfing the implications of the Steinhoff fake share manipulation allegations

Wolf in sheep’s clothing… Pretty much like many of our ombudsmen.

End of comments.



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