TEMPERS flared at the Retail Apparel Group (RAG) inquiry yesterday as FirstRand Bank was accused of playing "cat and mouse games" instead of answering questions relating to problems with the secured loans it had made to the now defunct RAG group.
Tensions have been brewing between the bank and the master of the court ever since FirstRand's request to be given advance notice of the topics on which it would be questioned was rejected by the commissioner a decision later confirmed in court.
The bank began giving testimony on Monday and much of this has revolved around the fact that First National Bank's (FNB's) security over the loans it made to RAG was problematic.
FNB Corporate CEO Theunie Lategan conceded earlier that FNB's security was problematic as the bank had loaned money to RAG subsidiary Retail Apparel Pty (RAP) although security for the loans was at the RAG level instead.
Although FNB tried to correct this during RAG's last days, this means that its multimillion-rand secured claim against RAG's estate may be set aside and the bank may have to stand in line with other creditors after the taxman has taken his cut.
But Lategan said he had no first-hand knowledge of the problems with FNB's secured loans. When master's counsel Stephan du Toit grilled FNB head of credit risk Ferdi Swanepoel later, Swanepoel said he too had no first-hand knowledge of the security problems.
Tensions then boiled over and Du Toit complained that FirstRand should have informed the commission who was the correct person to answer the matter. "We are dismayed by the fact that cat and mouse games are being played here. The costs involved here are very high and the taking of security is central," he said.
But the bank's counsel, John Suttner, hit back, saying it was the master's counsel instead who was playing games by refusing to provide the approximate topics months ago, so the bank would have known who should answer.
The inquiry is mandated to test the security of all the claims to money left in RAG's estate and any expungement of FirstRand's large secured claim could mean more money for other creditors.
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