ABSA

CityPress - - Business - DEWALD VAN RENS­BURG dewald.vrens­burg@city­press.co.za

Pub­lic Pro­tec­tor Bu­sisiwe Mkhwe­bane’s “clearly un­law­ful con­duct ex­poses her own lack of com­pe­tency”, said SA Re­serve Bank gover­nor Le­setja Kganyago on Fri­day.

“It is not good enough” that Mkhwe­bane has now ad­mit­ted she could not change the Re­serve Bank’s man­date, he said in a scathing new af­fi­davit re­spond­ing to the Pub­lic Pro­tec­tor an­nounc­ing she will not op­pose its re­view of her or­der to change the Con­sti­tu­tion.

“Both the re­port and the Pub­lic Pro­tec­tor’s an­swer­ing af­fi­davit dis­play a fun­da­men­tal lack of un­der­stand­ing of the mone­tary sys­tem and the role of cen­tral banks in it. It is an abuse of power for the Pub­lic Pro­tec­tor to as­sume that she should act in an area and di­rect fun­da­men­tal change to it, while dis­play­ing a lack of un­der­stand­ing of the ba­sic un­der­ly­ing prin­ci­ples,” said Kganyago.

Absa CEO Maria Ramos on Thurs­day made her own scathing at­tack on Mkhwe­bane’s re­port on the Bankorp bailout – essen­tially ac­cus­ing her of in­ten­tion­ally mis­in­ter­pret­ing facts and laws to drive an un­known agenda.

Ramos filed an af­fi­davit to re­view and set aside Mkhwe­bane’s re­me­dial ac­tion against Absa, which said that it must be made to pay back R1.125 bil­lion to the state.

How­ever, she also wants Mkhwe­bane to pro­duce all the in­for­ma­tion she re­lied on to form her con­clu­sions, which have been widely lam­basted as non­sen­si­cal or, at the very least, poorly sup­ported.

“The Pub­lic Pro­tec­tor is called upon ... to pro­duce all the doc­u­men­ta­tion re­ferred to in ... her re­port,” reads Ramos’ af­fi­davit.

This in­tro­duces the prospect of mak­ing pub­lic Mkhwe­bane’s in­ter­views with, for in­stance, Stephen Good­son – the con­tro­ver­sial for­mer Re­serve Bank nonex­ec­u­tive di­rec­tor spec­u­lated to have in­formed the Pub­lic Pro­tec­tor’s de­ci­sion to try to in­ter­fere in the Re­serve Bank’s con­sti­tu­tional man­date. Good­son was the only rel­e­vant source of in­for­ma­tion Mkhwe­bane con­sulted be­tween her in­terim and fi­nal re­ports on the mat­ter – a pe­riod that saw the Re­serve Bank man­date en­ter her sights.

The re­me­dial ac­tions Mkhwe­bane an­nounced were “based on ir­rel­e­vant con­sid­er­a­tions”, and are “ar­bi­trary”, “ir­ra­tional” and un­rea­son­able, said Ramos.

An ear­lier af­fi­davit by the Re­serve Bank has ac­cused Mkhwe­bane of over­step­ping the con­sti­tu­tional bounds of her pow­ers by telling Par­lia­ment what to do.

Ramos says that Mkhwe­bane did the same thing to other branches of gov­ern­ment.

“The Pub­lic Pro­tec­tor has ex­ceeded her own pow­ers, and usurped the pow­ers of the Spe­cial In­ves­ti­gat­ing Unit and the pres­i­dent,” she said.

Mkhwe­bane’s main or­der had been to make the pres­i­dent put the wheels in mo­tion to get the money out of Absa.

Ramos also ac­cuses Mkhwe­bane of sev­eral “ma­te­rial er­rors of fact”, prin­ci­pally her un­ex­plained re­jec­tion of a 2002 re­port by an ex­pert panel led by Judge Den­nis Davis that found that Absa gained noth­ing from the bailout.

Ac­cord­ing to Ramos, Mkhwe­bane “picks and chooses as­pects of var­i­ous re­ports be­fore her, de­lib­er­ately ig­nor­ing facts and find­ings that do not suit her con­clu­sion”.

BUSI BACKS DOWN – BUT DOESN’T RE­ALLY

Kganyago’s fury stems from Mkhwe­bane stand­ing by her rea­son­ing for want­ing to change the Re­serve Bank’s man­date. When she with­drew her op­po­si­tion to the Re­serve Bank’s ap­pli­ca­tion to re­view her re­port in an af­fi­davit this week, she made it clear that this was “only” due to le­gal ad­vice that she could not win. This is in turn only be­cause she phrased her re­me­dial ac­tion – to amend the Con­sti­tu­tion – as “manda­tory”. If it had been phrased as merely a rec­om­men­da­tion, there would be no prob­lem, said Mkhwe­bane. “The re­me­dial ac­tion for Par­lia­ment to con­sider re­view, as op­posed to peremp­tory amend­ment of the Con­sti­tu­tion, might have passed con­sti­tu­tional muster, which was in­tended to be the case,” she said. The ma­jor­ity of Mkhwe­bane’s af­fi­davit de­fends her con­clu­sion. Her or­der was that Par­lia­ment change the Con­sti­tu­tion to re­move “pro­tect the value of the cur­rency” as the chief man­date of the Re­serve Bank. The strange­ness of the or­der is that this ap­par­ent as­sault on in­fla­tion tar­get­ing fol­lows a re­port that not once men­tions in­fla­tion or in­fla­tion tar­get­ing. Mkhwe­bane ex­plains that the bailout of Bankorp three decades ago was done with­out re­gard to the so­cioe­co­nomic well­be­ing of South Africans. This kind of fail­ure “could con­tinue to be en­abled by the nar­rowly stated man­date of the Re­serve Bank”, she said. Her ap­par­ent con­clu­sion is that cen­tral banks must not be able to act as lenders of last re­sort, which is uni­ver­sally seen as one of their key roles. Kganyago said she made a “grave and rudi­men­tary er­ror”.

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