Barclays faces apartheid court action

Barclays and 22 other international companies are facing legal action brought by a South African activist group over their involvement in the country during the apartheid regime. The reparations appeal case is due to be heard in New York next week.

The action has been brought by the Khulumani Support Group, backed by Jubilee South Africa, against foreign companies that allegedly benefited from doing business in South Africa in the apartheid era.

Barclays was forced to pull out of the country in 1986 after protests against its involvement during the apartheid regime. A student boycott of the bank led to a drop in its share of the UK student market from 27 per cent to 15 per cent by the time it pulled out. Barclays returned to the country this year with the £2.9bn purchase of a majority stake in Absa, South Africa's largest consumer lender.

Barclays reiterated its view yesterday that the claims have no legal merit, saying it had "tried to be a positive influence for change" in South Africa.

Arguments in the reparations case will be heard in the Court of Appeals in the Second District of New York, on Tuesday. Khulumani and Jubilee supporters are planning demonstrations that day outside the South African Ministry of Justice in Pretoria in a last-ditch attempt to get the government to withdraw its opposition to the case.

The ministry says the case undermines the sovereignty of the South African government and has filed an affidavit calling for the dismissal of the case.

The group is appealing against a district court ruling in New York which rejected its application for reparations for victims of the apartheid regime.

Khulumani is seeking reparations from banks including Barclays, Citigroup and Deutsche Bank for lending money to the South African government in the 1970s and 1980s, which it says led to the expansion of the apartheid police and security apparatus. The group accuses oil companies including BP and Shell, and car makers including Ford and GM, of violating sales embargoes against South Africa at the time.