Business In The News South Africa

Government has no intention of amending Constitution on SA Reserve Bank’s mandate

CAPE TOWN, July 5 – Finance Minister Malusi Gigaba has instructed legal counsel to institute judicial review proceedings in a bid to have Public Protector Busisiwe Mkhwebane’s findings and remedial action on Absa Bank and the SA Reserve Bank (Sarb) set aside, his office announced on Wedneday afternoon.

In her report titled “Alleged Failure to Recover misappropriated Funds”, released in June, Mkhwebane criticised government and Sarb for failing to recover an apartheid-era loan of R1.125 billion from Bankorp Limited/Absa Bank advanced as an “illegal gift” to the Bankorp group.

Mkhwebane also directed Parliament to effect a Constitutional amendment to Sarb’s powers.

“The basis for the review is that, the remedial action breaches the principle of legality and the findings of fact are not necessarily adequately connected to the evidence which was before the Public Protector,” Gigaba’s office said.

“Prior to taking the above decision, the Minister engaged the Public Protector to gain a deeper understanding of the facts and evidence, which underpins some of the findings and conclusions against the Government. This was necessary because the investigation preceded the Minister’s tenure in office.”

Gigaba said the decision to seek judicial review was not taken lightly, but was done to protect the independence of the reserve bank.

“He has taken the decision primarily to protect the constitutional mandate of the South African Reserve Bank, an important institution created by section 224(1) of the Constitution to ‘protect the value of the currency in the interest of balanced and sustainable economic growth in the Republic’,” the ministry said.

“The role of the Reserve Bank is a policy question. Its primary mandate is in the Constitution. There is no intention in the part of the Executive to amend the Constitution in any manner. “

Gigaba has also instructed lawyers to challenge Mkhwebane’s directive that government should take steps, through the Special Investigating Unit, to recover the money from Absa.

“The view of the Minister, consistent with the principle of state succession, is that he is bound by decisions taken by his predecessors in this regard. These matters will also form part of the judicial review proceedings to be instituted.”

Gigaba joins Absa and Sarb which has instituted review proceedings following the release of Mkhwebane’s report.

Absa said it was approaching the High Court due to numerous misrepresentations and factual inaccuracies which formed the basis of the Public Protector’s findings, and what the bank submits were the “irrational and unreasonable” legal conclusions in the report.

Absa said the misconceptions and inaccuracies in the report were profound and damaging to its reputation.

“We have accordingly instructed our lawyers to immediately prepare an application to the High Court to have the report and its remedial actions set aside,” Absa said in June.

“We deny that Absa received R1.125 billion by way of unlawful assistance and we firmly maintain our position that all of Absa’s obligations to the South African Reserve Bank were met in full by October 1995.”

The Public Protector probed allegations that CIEX, a covert United Kingdom-based asset recovery agency headed by Michael Oatley, was contracted by Pretoria to assist in investigating and recovering misappropriated public funds and assets allegedly committed during the apartheid regime.

Mkhwebane said the South African government had failed to implement the CIEX report because she found no evidence that any action was taken to pursue the CIEX report after government had commissioned and duly paid for its investigation.

– African News Agency (ANA)

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