Regulators fail to halt rapid money-laundering after phishing scam
In a documented matter I have brought before parliament’s standing committee on finance, a private banking client was phished of R150,000.
While the originating bank’s internal systems successfully detected the fraud and suspended the victim’s account in two seconds, the stolen funds were routed into a corporate account held by a licensed gambling operator, from where the money crossed institutional borders and drained within 18 minutes, through a textbook sequence of money-laundering-placement, layering and integration.
The structural failure lies not in the speed of the criminals, but in the paralysis of the regulatory architecture that followed. The originating bank claimed it suspended the destination account, yet subpoenaed records proved funds kept moving. The gambling operator admitted in writing it could not verify who deposited funds into its accounts. The receiving bank disclaimed responsibility because the funds crossed an interbank line.
Most damning of all, the statutory watchdogs — the Financial Intelligence Centre and the relevant gambling boards — offered little more than a collective bureaucratic shrug, stretching responses to me and to the police over 21 months to date.
Jon Foster-Pedley formulated the critical issue in his article: “The issue is no longer a poor rule book, but showing that the rule book bites.” (“Conviction rate could return greylist risk”, August 11).
“Oversight” is a fascinating contranym — a word that can mean its opposite: either watchful care or an omission. The evidence in my case study shows that our watchdogs have allowed oversight to lapse into absolute omission. The reality on the ground is stark: the sagging, slack-wire fence of our financial ecosystem has collapsed. If ever a wall were demanded, it is now.
If our oversight authorities cannot muster the enforcement will to act decisively on a contained case with clear timestamps, subpoenaed records and written admissions, what confidence can the public have when the architecture is tested by billions or when the victim is not an individual citizen, but a province, a pension fund or the sovereign integrity of our financial system?
We cannot leave the smaller gates unguarded and expect the fortress to stand. Systems do not fail spectacularly in a moment; they collapse because small, routine failures are permitted to become normal. Without robust, unwavering implementation our anti-money-laundering laws remain a dead letter … and our regreylisting a deserved certainty.
Ike Boss
The Boss Group
Eskom’s high costs and unreliable supply drive manufacturers off-grid
I recently visited a successful business in Potchefstroom that exports a manufactured product and employs 200 people, mainly unskilled.
It has recently moved to a new facility that cost more than R100m, yet it doesn’t have an electrical connection to Eskom. Why? Because Eskom power is too expensive and unreliable.
The business has almost completed construction of a grid-free factory, using batteries, solar and generators, at a long-term cost that is cheaper than what Eskom can offer.
I am sure this is playing out all over South Africa. It is estimated that up to 350,000 jobs have been lost in industry due to the 1,500% increase in the price of electricity since 2000.
The president is rearranging the deck chairs on the SA Titanic with his separation of the transmissions company from Eskom. It looks good in theory, but if you just employ the same lethargic political management from Eskom with the same inefficient militant workers you will have the same result as you have with Eskom now.
It is in the business of employing ANC cadres and supporting BEE and employment equity, and as a byproduct produces expensive electricity that is destroying all the country’s high-power-user manufacturers.
The president and his advisers are not prepared to get to the crux of the problem ― cutting Eskom’s costs ― because they will run into conflict with their party, unions and beneficiaries of BEE and employment equity.
Rob Tiffin
Paarden Eiland
Political reluctance, union resistance undermine energy sector reform
One can only hope National Union of Mineworkers (NUM) general secretary Mpho Phakedi reads Business Day (“NUM threatens legal action over Eskom restructuring”, August 6).
The NUM’s objection to the Eskom restructuring includes that leaving the provision of electricity “in the precarious hands of the private sector, whose primary motivation is the making of profit” would lead to price increases.
Where has Phakedi lived in the past few years? Electricity prices have multiplied many times over (even though at the same time the state-controlled and, dare I say it ― unionised ― Eskom has not made a profit nor been able to meet demand.
In the same edition we learnt that electricity output has now fallen for the 13th consecutive year, not least because consumers have “privatised” their electricity needs rather than being at the mercy of Phakedi and the “Better Life For All” brigade.
FJ Mueller
Parys
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