Banks in the dock over apartheid

THREE German banks have found themselves in the dock in New York, charged with supporting the former racist apartheid regime of South Africa. Judge Richard Chasey must now decide if a class-action lawsuit against the banks holds water. His decision as to whether Dresdner Bank, Deutsche Bank and Commerzbank are liable for millions in damages will be given on 23 August.

The banks are among several companies targeted by US lawyer Ed Fagan, who won prominence by pressing Swiss banks into compensating the relatives of Holocaust victims.

Fagan accused banks, including several Swiss and American operations, of lending billions of dollars to South Africa when international sanctions were in place. Computer giant IBM has also been drawn into the case and Fagan has warned that other companies may be charged.

If successful, Fagan reckons the lawsuit could win compensation of up to e104bn (£75bn) for the South African victims.

Commerzbank sources claimed that loans to South Africa had only been granted in accordance with existing regulations and were solely for infrastructure projects. Without them, the majority of the population would have been even worse off, the sources added.

It is alleged Fagan has sent letters to the companies in question, indirectly threatening a boycott campaign unless they opt for quick, outof-court settlements.

Critics say the lawyer's action is raising false hopes in South Africa, where about 21,000 victims of apartheid are still waiting for State compensation as recommended by the country's Truth and Reconciliation Commission in 1998.

Thandi Shezi of the Khulumani victims' group said last month that people dialling a toll-free number set up by Fagan's helpers were often under the false impression that joining the class action lawsuit was a guarantee of quick payment. Another US lawyer, Michael Hausfeld, is also planning a class-action suit against about 50 international companies he accuses of collaborating with the apartheid regime.

'What is probably one of the grossest violations of human rights was imposed by apartheid,' Hausfeld said. 'It left a wake of victims that has never been accounted for by those who assisted and furthered the commission of the crime.'