Actions threatened SARB’s independence’

Public protector accused of collusion, trying to undermine the central bank

IN A new affidavit filed in the high court in Pretoria, Public Protector Busisiwe Mkhwebane is accused of undermining the independence of the SA Reserve Bank (SARB), while allegations of possible collusion have emerged.

The affidavit by legal counsel for the SARB highlights Mkhwebane’s meetings with President Jacob Zuma’s legal advisers and the State Security Agency (SSA) just weeks before her final report on her investigation into the reserve bank’s 1985 bailout of Bankorp, now Absa bank, was released.

The affidavit points to possible collusion.

The affidavit describes the meeting with the Presidency’s legal team as “highly irregular”.

“The meeting traversed the public protector’s proposed remedial action to amend the constitution to deprive the reserve bank of its role in protecting the value of the currency.

“This is an aspect of the remedial action that had nothing to do with the Presidency. There is no legitimate basis on which this ought to have been discussed with the Presidency,” the affidavit stated.

The SARB contends Mkhwebane altered “substantially her remedial action” in her preliminary report without allowing right of the reply to the reserve bank and others.

“The public protector did not provide this opportunity to anyone other than the Presidency.”

In the affidavit, the SARB took strong exception to the bank’s mandate being discussed with the Presidency as she was constitutionally obliged to conduct her probes independently and without bias.

“Discussing these aspects of the report with the Presidency destroys that independence.”

Mkhwebane also did not provide a transcript of the interviews with the president’s legal advisers or with the SSA.

A few handwritten notes from the public protector are provided, including one that deals with the “vulnerability” of the reserve bank.

“It is unclear on what possible basis the vulnerability (and vulnerability to whom) of the reserve bank was relevant to the public protector’s investigation into the CIEX report,” the affidavit said.

“The fact that the topic was even discussed with the State Security Agency indicates that the public protector’s investigation was aimed at undermining the reserve bank. It also indicates that by May 2017, the investigation had turned from the questions whether government had implemented the CIEX report to launch an attack on the reserve bank.”

SARB called on Mkhwebane to provide a transcript of meetings with the SSA and the president’s legal advisers and to explain the omissions from her record and defend herself against the central bank’s allegations.

Failure to do so would result in the central bank submitting new grounds for review, including that the public protector’s recommendations were made for “an ulterior motive or purpose”, that Mkhwebane was “biased or reasonably suspected of bias”, and that the probe was “procedurally unfair”.

“These are serious accusations to make against the public protector. I do not make them lightly,” the SARB’s legal counsel argued in the affidavit.

In June, Mkhwebane released her report in which she directed Absa be ordered to repay R1.12 billion regarding the bailout.

She went further to recommend that the constitution be amended to change the reserve bank’s mandate from protecting the local currency to ensuring the socio-economic well-being of citizens.

The expanded focus of her investigation was severely criticised.

Last month, the protector’s recommendation on the SARB was set aside by the high court in Pretoria.