Four apartheid victims filed suit on Wednesday against Citigroup Inc., UBS AG and Credit Suisse, alleging the banking companies helped finance the violent South African apartheid regime and made billions in loans to further its crimes against humanity.

The lawsuit, filed in Manhattan federal court, seeks class- action status on behalf of other victims of human rights violations under South Africa’s apartheid, a government policy of white rule and racial discrimination against black Africans, who were denied basic rights and beaten or killed when they protested the country’s unjust laws.

The suit seeks unspecified damages to be determined at trial.

The plaintiffs also ask the court to order the defendants to produce documents related to their commercial and financial activities in South Africa from 1948 forward. They also want the creation of an independent international commission to provide an accounting of profits that may have been unjustly obtained by the defendants.

Two of the named plaintiffs said they were tortured and two of the plaintiffs are surviving parents of children who were killed in South Africa.

The suit alleges that the defendants had conspired with each other to provide financing for technology systems, equipment and other products used by the apartheid regime to commit crimes against humanity from 1948 to 1993. It further alleges that despite the fact that apartheid officially ended in South Africa in 1994, the defendants continue to profit from the conspiracy.

“As a direct and proximate result of defendants’ actions, the apartheid system was supported and enabled to continue its systematic murders, massacres, killings, imprisonments, torture and forced removals,” the suit alleged.

BANKS RESPOND

A UBS spokesman told Reuters, “UBS completely rejects these claims as groundless and unjustified and we will defend ourselves vigorously,”

A Credit Suisse spokesman said that while the bank had not yet received a copy of the suit, it did not see any basis in fact or law for the action.

“We operated at all times according to all applicable law and regulations,” the Credit Suisse spokesman said.

He also said U.S. courts were not an appropriate forum for the litigation.

The Credit Suisse spokesman criticized Edward Fagan, a plaintiff’s lawyer in the case who held a news conference about the planned lawsuit in Zurich, Switzerland, on Monday:

“It appears Ed Fagan is relying on publicity, not the law.”

A Citigroup spokesperson said the company had not seen the suit yet, but added: “Based on the allegations we have seen, we believe such a suit would have no merit.”

The suit proposes that claimants be organized into five different classes: surviving parents; surviving children or dependents; surviving spouses; torture victims and imprisoned persons.

It said the individual classes include hundreds of thousands, if not millions, of South Africans.

PLAINTIFFS’ LAWYER HECKLED

According to the suit, one of the U.S. banks that allegedly provided the most support during apartheid and which violated the financial sanctions campaign restriction was a predecessor of Citigroup. The suit alleged that loans made from 1960 to 1993 supported the regime.

“Predecessors of Citigroup provided Apartheid with in excess of $650 million in principal alone. This amount represented about one-fourth of all loans made by U.S. banks to support apartheid, the military, police and cooperating business,” the suit said.

It alleged that instead of ceasing their lending practices and demanding repayment of outstanding monies, Citigroup’s predecessors converted loans to long-term loans that could be paid back later with interest.

“The money from predecessors of Citigroup directly benefited and supported the apartheid reign of terror in South Africa,” the lawsuit said.

When Fagan began the news conference in Zurich, a jeering crowd forced him to move from the Paradeplatz, where Credit Suisse and UBS, Switzerland’s two biggest banks, have formidable presences. Credit Suisse is headquartered in the Paradeplatz, while the main Zurich offices of UBS are located in the office complex. Hecklers were angered at what they saw as just another attempt to smear the country’s good name.

On Tuesday, Washington, D.C., lawyer Michael Hausfeld, a prominent plaintiffs’ lawyer, said he is working with a group of about 20 lawyers and academics to file a different suit on behalf of apartheid victims. He said he expects the suit will be filed at the end of the summer after it is thoroughly researched.

He had criticized Fagan’s suit as premature and said it denigrated the entire issue by trying to hold a small number of companies responsible for the “entirety of evil.”

Gail Appleson,  Reuters, June 19, 2002