Land Bank determined to fix deficiencies, says outgoing CEO
|Published
Outgoing chief executive of the Land Bank Ayanda Kanana has vowed that the embattled financial institution will plug the holes that led to a qualified audit outcome this past year. Photo: File
OUTGOING chief executive of the Land Bank Ayanda Kanana has vowed that the embattled financial institution will plug the holes that led to a qualified audit outcome this past year.
Addressing the parliamentary standing committee on finance yesterday, Kanana said the Land Bank had been let down by one of its intermediaries that did not submit financial statements, resulting in a scope limitation.
In December, the Land Bank received a qualified audit outcome from the Auditor-General (A-G) for the year ended March 31, 2021.
Kanana said the qualified outcome was an “improvement” from a disclaimer the bank had received the previous year.
“The qualification that we’ve got, sadly, is not a representation of where we should be. We should be sitting at an unqualified audit opinion with findings,” he said.
“What happened is that one of our intermediary partners whom we work with to advance funds to farmers in terms of loans as an agent of the Land Bank was not co-operative with giving us the necessary bank statements in order for the A-G to perform their audit.
“The bank is taking steps to address internal control deficiencies that led to the audit outcome and has reinstituted the remedial programme to address the same.
“The majority of the loan book previously managed by intermediaries has now been in-sourced and managed internally.”
It emerged yesterday that Kanana had resigned from his position less than two years into the job, but no explanation was given for his premature departure.
Kanana joined the Land Bank on March 1, 2020, and has a notice period that runs until the end of April 2022.
He joined the bank at a very difficult time and has been instrumental in leading the turnaround efforts of the entity that provides 29 percent of South Africa’s agricultural debt.
In 2020, the Land and Agricultural Development Bank of South Africa defaulted on R50 billion of debt commitments as many of its customers battled to repay their loans mainly due to drought.
AgriSA executive director Christo van der Rheede was full of praise for the role played by Kanana to steer the ship in the right direction. “In his tenure, Kanana was a consummate professional who made all interactions with the institution and himself pleasurable,” Van der Rheede said.
“He took over the role at a crucial time and played a critical role in trying to steer the ship to safe waters, so to speak. For that, we extend our sincerest appreciation and well wishes.”
Kanana yesterday admitted that the Land Bank had not been able to close on the default. “We are working tirelessly with lenders to assist us in making sure that the bank is out of default,” he said.
“We are working on a revised liability solution, the latest on the table is a third solution to try and get the lenders to get the bank out of default. This also talks to the going concern.
“This also threatens our existence in the market and supporting particularly those small to medium-size farmers who have not been accessing the Land Bank for the past two years.”
The bank, a wholly-owned government Development Finance Institution, has since received a R3bn capital injection from the government and will receive a further R7bn over the next three years.
Van der Rheede said Agri SA remained hopeful that the bank’s challenges relating to its debt commitments and liquidity will still be tackled with urgency.
“It is of critical importance that the bank returns to being a stable, profitable and trusted institution, as many of the new entrants in the sector rely on this vehicle where they would otherwise not receive the same opportunity and assistance elsewhere,” he said.
National Treasury director-general Dondo Mogajane talked down any questions of folding the Land Bank.
“Folding the Land Bank is not on our radar now. All that we are doing is to act as much as we can to save the bank to perform the important function they perform.
siphelele.dludla@inl.co.za
BUSINESS REPORT ONLINE