Land Bank treasury instruments worth tens of millions are in circulation and could be used to defraud farmers, following a spate of thefts from the bank’s safes, documents in Farmer’s Weekly’s possession reveal. I n October 2007 a total of 28 bills and promissory notes for R1 million each were stolen from a locked safe in the dealing room, as well as several personal items from locked cupboards, an internal memo shows.
It is understood 27 bills are still in circulation. The theft, which was never publicly disclosed, was only discovered late in November after a Mpumalanga company tried to cash a Land Bank bill for R1 million at the First National Bank (FNB) in Standerton. “All Money Market instruments were checked immediately and it was found that three Land Bank Bills and 25 Land Bank Promissory Notes were missing from the safe in Treasury,” says a memo from the bank’s treasurer, Makgale Gwangwa. The transaction was blocked after the Land Bank received a copy of the bill from FNB and found the authorising signatures had been forged.
The Land Bank claims it took appropriate action after the theft by referring the matter to the board and introducing stringent procedures governing the issuing and monitoring of its financial instruments. claims the case was reported to the Scorpions and is being investigated, but couldn’t supply a case number. Sources close to the bank say the case was never pursued. he bank said it suffered no financial loss because it immediately informed all clearing banks not to honour the instruments. It declined to comment on whether any charges were laid, or remaining bills recovered. But a source close to the Scorpions says there remains a high risk that bills still in circulation could be used to commit fraud, because unsuspecting farmers could accept them as payments, wrongly believing banks would honour them.
“The Land Bank can’t avoid responsibility for lapses in its controls that allow fraud to be perpetrated against a third party,” says the source. Gwangwa himself clearly believed the thefts warranted immediate action. “Due to the serious nature of this offence, hereby urge you to report this theft to the SAPS without delay,” his memo reads. He confirmed last week he had written a memo informing the bank’s internal audit unit of the theft of the notes, his serious misgivings about security at the treasury, and that he’d urged the bank to report the matter to the police. He resigned soon afterwards.
The memo was copied to several senior bank executives, including Phil Mohlahlane, the agriculture department’s deputy DG general who served as the bank’s acting CEO at the time, and his chief operating officer Saki Zamxaka, a former economic advisor to the agriculture minister. Both left under a cloud earlier this year. – Stephan Hofstätter
