[Take note of the comments by COSATU – the commie-dominated trade union. They are saying exactly what I was saying: Barclays is taking over existing capital – it is doing nothing new – contrary to ANC-hype. Jan]

Johannesburg – The Congress of SA Trade Unions said on Monday it was wary of Barclays’ efforts to buy a 60% stake in Absa.

Absa announced on Monday it had received a “firm offer” from Barclays to buy a 60% stake in the company.

“We are concerned that this is not new investment, but the takeover of existing capital, at a big profit to the existing shareholders,” said Cosatu spokesperson Paul Notyhawa.

“Cosatu will be monitoring very closely to see that Barclays honours its commitments to transformation, in particular to serve the poor and protect and create jobs.”

The union was concerned about five issues: transformation, national goals, jobs, the strength of the rand and banking for the poor.

“The government must ensure that Absa’s new owner, and the rest of the sector, do more to implement all the transformation aims set out in the Financial Sector Charter,” said Notyhawa.

Worried about retrenchments

The deal also could undermine the national interest, he said.

“Cosatu is concerned that having such a large part of the banking sector under foreign control could make it easier for capital to be moved out of the country at some future date, with serious consequences.”

Notyhawa said the union was worried about Absa CEO Steve Booysen’s comment on Monday that two percent of the bank’s workers would be retrenched over four years.

“This will be fought by Cosatu and our affiliate (banking union) Sasbo.

“The new management must be committed to saving and creating jobs, as part of its participation in the transformation of society,” he said.

If the deal led to the strengthening of the rand, this would also be a cause for concern.

“Given that the overvalued rand already has led to a bloodbath of job losses, any further rise would be intolerable,” he said.

The union would continue to campaign for banking to be made accessible to all.

“We shall be insisting that Absa’s new owners co-operate fully in the drive to make banking accessible to the workers and to end discrimination against the poor,” said Notyhawa.

Banking union Sasbo, however, welcomed the transaction.

“We believe the deal will send positive signals to the rest of the world that South Africa is prepared to open up its economy, provided companies display a commitment towards socio-economic issues in South Africa,” said Ben Venter, deputy general secretary of Sasbo.

Venter said the deal would bring in foreign investment, encourage positive competition in the banking sector and promote the strong growth of Absa in Africa.

Business Unity South Africa (Busa) agreed the deal would benefit South Africa.

Edited by Adrienne Taylor

Source: Finance24.com
URL: http://www.finance24.com/articles/default/dis…/p>