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South Africa: No Nedbank Apology for Laubscher
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Business Day (Johannesburg)
14 May 2008
Posted to the web 14 May 2008
Regis Nyamakanga
Johannesburg
NEDBANK Group said yesterday it had no apology to make to its former CEO Richard Laubscher, who quit five years ago after the bank's profit sank.
Laubscher sought a public apology at the bank's annual general meeting to clear his name after he was previously accused of having "gambled" with the bank's money.
Laubscher resigned in 2003 after 12 years as CEO after Nedbank acquired BoE for R7,7bn in July 2002. The bank had to sell R5,2bn in stock to existing shareholders in May 2004 to shore up its capital after reporting a loss in 2003, its first in a decade.
"I willingly resigned and then a few months later they said I gambled with Nedbank's money," Laubscher told the meeting in Johannesburg.
Chairman Reuel Khoza rejected Laubscher's claims that Nedbank had held negotiations with him about rejoining the board. Khoza said there was no need for an apology and there were no issues that had to be resolved with him.
Laubscher said he was objecting to remarks made by former Nedbank chairman Warren Clewlow in a 2004 interview with Moneyweb in which he was quoted as saying that Nedbank executives had "gambled" with shareholders' money and that he had been "unfairly" singled out without a clear collective accountability by the bank's board. Laubscher said that on two occasions Clewlow had asked him to "draft a letter" that Nedbank would use to apologise to him, but that Clewlow later refused to do this.
Laubscher said that Khoza and Bob Head of Old Mutual, the parent company , had negotiated with him "with a view to appointing" him to certain Nedbank boards, but that the discussions were never concluded.
Khoza said: "The Nedbank Group board stands by all public statements it has made in the past. The board is of the view that there are no issues with Laubscher that need to be resolved or for which an apology was or is required.
"This was officially communicated to Laubscher by Warren Clewlow in a letter dated September 2 2004."
Khoza said the word "gamble" as referred to by Laubscher was introduced by a journalist and used to describe some of the risks taken by the bank during 2002 and 2003.
Laubscher had also argued that Nedbank's 2002 takeover of BoE was a bad decision that cost the bank R3,6bn and that BoE's net asset value was less than it had been made out to be.
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Boardman told the meeting that another interest rate increase will hurt the economy and the bank's earnings.
An interest rate increase "could have a serious impact not only on the economy but also on the earnings of the bank," he said. "We're going into a much tougher period than we had over the past four years."
The central bank raised its benchmark interest rate by half a percentage point to 11.5% on April 10, the fifth increase in less than a year, as rising food and energy costs kept inflation above the 3% to 6%.
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