Saturday, January 16, 2021

FNBB faces class action suit from angry clients

Scores of Batswana who allege that they may have been defrauded by Wesbank, the motor vehicle financing wing of First National Bank of Botswana, are understood to be considering class action.

Documents passed to Sunday Standard suggest that Wesbank may be undervaluing cars repossessed from Batswana and which are then subsequently sold to a South African garage at bargain basement prices.
Among the more than 100 locals whose cars have been repossessed and sold to Ambereira Trading in South Africa are an industrial court judge, a prominent ruling party politician and parliamentary candidate and scores of local businessmen.

In one instance, the bank valued a Mercedes Benz luxury car at less than P100 000; the value provided by local Merces Benz dealers, Naledi Motors, was P400 000. This is in spite of the fact that the bank last year told Sunday Standard that they use the Mead and Mcgrader valuation book which is the same valuation book used by Naledi Motors.

The car was later given to Ambereira Trading in Lehurutshe, South Africa, at P175 000. The car was then imported to South Africa before the South African garage paid the sale money and the money was only remitted to the Wesbank account after more than six months. The Botswana client, who had surrendered the car to Wesbank, was made to bear the costs of exporting the car to Ambereira Trading in South Africa.

In another incident, a local client who was unhappy that his Land Rover Freelander, which was subsequently sold to Ambereira, had been undervalued challenged the Wesbank valuation through his lawyers. He also took up the issue with the Land Rover Association and the AA Motor Vehicle Ombudsman.

Records which have been passed to the Sunday Standard suggest that Ambereira Trading is the biggest beneficiary of Wesbank’s bargain basement prices and is believed to have bought more than 100 repossessed cars from the bank in the last three years.

In a number of cases, there were Batswana buyers whose bids were higher than that of Ambereira, but the bank records state that the cars were subsequently sold to Ambereira because Batswana bidders had lost interest in the vehicles.

All the cars bought by Ambereira are usually taken to South Africa and de-registered even before the company had paid their bid prices. The cross border transactions are facilitated by a letter from one of the Wesbank bosses whose name is known to the Sunday Standard. The sale proceeds usually take up to one year before they are transferred from Ambereira to Wesbank.

The First National Bank, which is listed on the Botswana Stock Exchange, is among the biggest losers in the transactions because, in most cases, by the time the money is remitted its value has been eroded by both inflation and fluctuations in the Pula Rand exchange rate. Insiders say the losses incurred by the bank are huge, considering the volume of units bought by Ambereira.

The bank was this week mulling over setting up a suspense account to help the accounting difficulties occasioned by the delay in remittances from Ambereira.

Meanwhile, the Botswana Police Service has already notified First National Bank that it is investigating allegations of impropriety at Wesbank. This followed complaints that hundreds of Batswana may have been defrauded by the vehicle financing division of the First National Bank of Botswana.

Police investigations were initially halted under mysterious circumstances following instructions from a senior officer from the Criminal Investigations Department (CID).

The Sunday Standard has, however, raised documentation from the Commissioner of Police stating that the investigation has been reinstated. This followed a complaint from an aggrieved Wesbank client who believes he may have been defrauded.

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