WE WOULD like to acknowledge the letter published in Business Report on September 8, from Mr Mike Brown. We appreciate the concerns raised and the opportunity to respond.
The losses at African Bank Investments Limited (Abil) and its subsequent curatorship have caused much angst for all who have been affected.
The Stanlib Money Market Fund had a limited exposure to Abil (1.74 percent), which was within the fund’s mandate. It is correct that a component of the exposure has been put into a retention fund for clients, which will be accessible once Abil is no longer illiquid. This was a mechanism approved by the Financial Services Board to avoid the dilemma of the exposure remaining in the fund – if this happened, existing investors would have greater and greater exposure if other investors left the fund, and would expose new people who were entering the fund.
By separating the illiquid Abil funds, this situation is avoided. The amount of R1 000 was not a Stanlib charge – it was the reduction of units as a result of the Reserve Bank’s proposal for restructuring Abil and devaluing the existing investments by 10 percent. The overall impact on the return for the year was 0.16 percentage points.
We can confirm that e-mail and postal communication has been sent to our valued customers, and we remain committed to continuous engagement. However, due to the nature of the event that transpired, immediate action had to be taken and the communication lead time was not optimal. We regret this and we know from an investor perspective this is unacceptable – we wish we could have avoided this.
This is a relatively complex issue and we urge investors to talk to financial advisers or contact us directly, or visit our website, if further explanation is required.
Bongani Mageba
STANLIB Retail Managing director