News / South Africa

Yadhana Jadoo
3 minute read
21 Jun 2017
5:05 am

Busisiwe’s bank blunder

Yadhana Jadoo

In the wrong? Experts say the public protector has overstepped her powers.

Advocate Busisiwe Mkhwebane. Picture: Jacques Nelles

Public Protector Busisiwe Mkhwebane stands accused of overstepping her role and effectively acting unlawfully for instructing parliament to constitutionally amend the powers of the SA Reserve Bank (Sarb).

This is after what has been dubbed her “Absa report”, which followed an investigation into UK-based assets recovery agency CIEX and suspected looting during the apartheid era. The investigation involved a multibillion-rand bailout of the Bankorp group, which was eventually purchased by Absa in 1992.

As part of Mkhwebane’s remedial actions, she recommended section 224 of the constitution, dealing with Sarb’s independence, be amended, which the bank says would in effect hamper its mandate to protect the value of the rand.

Corruption Watch, while urging Absa to respect Mkhwebane’s findings to repay the R1.125 billion or launch a judicial review, also expressed “extreme disquiet” at her instruction to parliament.

“If she believes this is within her powers, she has either received alarmingly poor legal advice or has chosen to ignore her legal advisors,” its director, David Lewis, said.

“This decision smacks of a combination of ignorance and arrogance and is condemned without reservation.”

Parliament indicated yesterday it had received the report which it was considering via the “usual internal processes” to “determine an appropriate course of action”. Sarb remained firm that it would seek an urgent review to have Mkhwebane’s instruction set aside.

“The Reserve Bank has consulted its legal team and has been advised that the remedial action prescribed by the public protector falls outside her powers and is unlawful,” it said.

“The Reserve Bank has been advised to bring urgent review proceedings to have the remedial action set aside. The Reserve Bank has resolved to do so.”

The amendment would strip Sarb of its “key competency to protect the value of the currency and the well-understood role that central banks play in securing price stability” and in turn have a negative impact on its independence, it added.

Absa said it was studying the report and would consider legal options, including seeking a high court review.

“Absa met all its obligations in respect of the loan provided by the SA Reserve Bank by October 1995. It is our firm position that there is no obligation to pay anything to the SA government,” it said.

The Banking Association of SA slammed Mkhwebane’s directive, saying she had gone too far in her eagerness to demonstrate her independence.

It, too, was of the view that she had erred in her remedial action and would likewise seek an urgent court review.

The DA will seek a meeting with the head of parliamentary legal services regarding a remedial action “which in itself appears sinister”, MP Glynnis Breytenbach said.

“Clearly, her recommendation goes beyond what she is legally empowered to do and is indicative of her long-term plan to render the public protector’s office ineffective.”

She said Mkhwebane’s order was disturbing and meant that she had failed to understand her role and powers as public protector, “or she simply is prepared to break the law to drive political agendas”.

The EFF also questioned Mkhwebane’s “constitutional wisdom”.

Spokesperson Mbuyeseni Ndlozi said: “No matter how noble her proposed amendment may be, she has no power to instruct a constitutional amendment.”

National Treasury said it could not comment until it studied the report.

Mkhwebane’s office said her remedial action “does not in any way amend the constitution or violate the parliamentary process of approving or rejecting the Bill … hence it refers the chairperson to the parliamentary process”, her spokesperson, Cleopatra Mosana, said.

“When a Bill amending the constitution is introduced, the person or committee introducing the Bill must submit any written comments received from the public and the provincial legislatures to the speaker for tabling in the National Assembly.”

Referring to the public protector’s powers, Mosana added that Mkhwebane was able to take appropriate remedial action with regards to any improper conduct in state affairs or conduct in the state affairs which may result in impropriety or prejudice. –