German banks, IBM hit with apartheid lawsuit

Three German banks and U.S. computer giant IBM were to be added on Monday to a class action suit seeking huge sums in reparations for victims of South Africa’s apartheid regime, a lawyer for the case said.

The claims against International Business Machines and the banks — Deutsche, Commerz and Dresdner, a unit of insurer Allianz AG– will be filed in a U.S. court on Monday, said attorney John Ngcebetsha.

They are the latest targets in a $50 billion class action suit announced by maverick U.S. lawyer Ed Fagan last month.

Swiss banks Credit Suisse and UBS, and U.S.-based Citigroup were first named in the suit, but Fagan had warned other firms would be targeted.

“We are adding Deutsche, Dresdner, Commerz and IBM to the class action today,” Ngcebetsha told Reuters.

He said the claims against the German banks were similar to those levelled at the Swiss and U.S. firms — namely that the banks loaned billions of dollars to a cash-strapped apartheid regime facing international sanctions and political isolation.

The Swiss banks have dismissed the claims as “preposterous”, and the Swiss government has said the suit was not the right way to resolve a political problem.

The claim against IBM dates back to 1952 when it and other international computer companies began supplying technology and equipment to South Africa, Ngcebetsha said.

“The computer companies knew full well that their equipment, technology and systems were used within the apartheid system in a manner that facilitated and encouraged the violation of human rights and the commission of atrocities against the majority of South Africa’s population,” the claim states.


South African legal experts say the suit faces daunting hurdles, while critics argue it is has raised false hopes among victims frustrated by long-delayed government reparations.

Fagan’s group are encouraging South Africans to phone a toll-free number to join the class action. About 1,000 people have called so far and lawyers are assessing their applications.

“Some people think if they call the number and wait one or two months, the money will come. We have told them it could take five or six years,” said Thandi Shezi, a programme coordinator for the Khulumani victims’ rights group.

Ngcebetsha denied the suit was sowing confusion, saying: “All our clients are acutely aware that if we do not win, we will not get anything”.

The Khulumani group has held community meetings in Soweto township and other areas to explain the implications of the suit, Shezi said.

“People are confused,” she said, adding that some believed Fagan’s suit had replaced state compensation recommended by the Truth and Reconciliation Commission (TRC).

The TRC, set up by former President Nelson Mandela to heal the country’s apartheid wounds, recommended in 1998 that the state pay more than three billion rand ($300 million) to more than 21,000 victims of apartheid.

Some victims received interim payments, but delayed final payouts have fuelled anger and resentment against the government and TRC, which was headed by Nobel Prize winner Desmond Tutu.


Last week, Khulumani filed a suit against Tutu and President Thabo Mbeki seeking a copy of the government’s draft reparations policy. Pretoria says it will be released only after the TRC gives its final recommendations to Mbeki in August.

Standard Bank Chief Economist Iraj Abedian told the Cape Town Press Club on Monday that apartheid reparations were crucial to maintaining social and macro-economic stability.

“Unless you deal with this redress, the issues will come back and haunt you very unexpectedly,” he said, estimating the cost to government at up to five billion rand with a worst case economic scenario of 15 billion rand over three years.

$=10.01 rand

Darren Schuettler,  Reuters, July 1, 2002

Categories: Africa, Odious Debts, South Africa

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