BLOODY NOSE FOR A BULLY

Dis­turbingly, the Na­tional Credit Reg­u­la­tor seems to have the same de­gree of re­spect for a free press you’d ex­pect to find in Rus­sia

Financial Mail - - EDITOR’S NOTE BY ROB ROSE - @ro­brose_za roser@fm.co.za

On a cloudy win­ter’s morn­ing on Au­gust 14 2014, three uniden­ti­fied men pitched up at the house of debt coun­sel­lor Deb­o­rah Solomon in Brack­en­fell, Cape Town. They were ag­gres­sive, shout­ing to be let in, re­peat­edly rat­tling and kick­ing her gate.

The only peo­ple at the house were Solomon’s el­derly par­ents, who were badly rat­tled.

“It was enor­mously trau­matic for my par­ents. I was in a meet­ing at the time, but my neigh­bour called to ask what was hap­pen­ing at my house. For more than five hours, those men re­fused to iden­tify them­selves,” she says to­day.

Then they went to Solomon’s of­fice and tried to mus­cle their way in. Even­tu­ally, Solomon ar­rived and fig­ured out that the men were “in­ves­ti­ga­tors” with the Na­tional Credit Reg­u­la­tor (NCR). They said her reg­is­tra­tion as a debt coun­sel­lor with the reg­u­la­tor en­ti­tled them to search her premises. They stayed at her of­fice, de­mand­ing files, un­til 7 pm.

It’s a dis­turb­ing out­line of one of the most bla­tant tales of abuse of state power in re­cent times — one that un­der­scores a dis­turb­ing in­tol­er­ance for free­dom of speech from within govern­ment in­sti­tu­tions.

The back story is this: three days ear­lier, Solomon was quoted in an ar­ti­cle crit­i­cis­ing the NCR for be­ing asleep at the wheel while African Bank was mer­rily rip­ping off cus­tomers. She said the reg­u­la­tor had be­come “an ac­ces­sory to the dev­as­ta­tion that has oc­curred for mil­lions of con­sumers” by fail­ing to do its job of prop­erly en­forc­ing the Na­tional Credit Act.

NCR CEO Nomsa Mot­she­gare was fum­ing. She fired off a let­ter to Solomon de­mand­ing that she re­tract her state­ment. Solomon, feisty and blunt, re­fused. So the next day, Au­gust 12, Mot­she­gare ap­pointed the three in­spec­tors who, 48 hours later, ar­rived at Solomon’s house and be­gan kick­ing the gate.

Two weeks af­ter the “raid”, the reg­u­la­tor ap­plied to the na­tional con­sumer tri­bunal to can­cel Solomon’s reg­is­tra­tion. Its ar­gu­ment? She’d “brought the NCR into dis­re­pute” by pub­licly crit­i­cis­ing it.

Fi­nally, last week, the tri­bunal rub­bished Mot­she­gare’s flimsy ar­gu­ment, rul­ing in Solomon’s favour. It said Solomon’s views were “no more than ro­bust crit­i­cism” and it would “be con­trary to the prin­ci­ples of a con­sti­tu­tional democ­racy to . . . sti­fle those who hold public bod­ies ac­count­able”.

The tri­bunal was also “con­cerned with the rea­sons” for the in­ves­ti­ga­tion, say­ing the NCR’S ac­tions could be “per­ceived as in­tim­i­dat­ing and meant to si­lence a critic”. In other words: a swag­ger­ing bully.

Mot­she­gare wouldn’t an­swer ques­tions from the Fi­nan­cial Mail, re­fer­ring queries to NCR com­pany sec­re­tary Le­siba Mashapa. Mashapa says his or­gan­i­sa­tion will ap­peal the tri­bunal’s rul­ing, as it “opens the door for reg­is­trants to en­gage in con­duct that un­der­mines the au­thor­ity of the NCR with im­punity”.

He says: “We’re not try­ing to gag crit­ics. But free­dom of speech has lim­its and must be ex­er­cised in such a way that [it] doesn’t un­der­mine the in­tegrity and au­thor­ity of govern­ment de­part­ments.”

It’s a wafer-thin ar­gu­ment — one you could imag­ine be­ing trot­ted out by such free speech ad­vo­cates as

Kim Jong-un or Don­ald Trump. Af­ter all, a cor­ner­stone of free speech is that you’re en­ti­tled to ex­hibit what Salman Rushdie dubs a “fear­less dis­re­spect”.

But then the con­sti­tu­tion prob­a­bly isn’t a big fea­ture on the NCR’S desks. Speak­ing of the raid on Solomon’s house, Mashapa says: “If [we] con­duct an in­ves­ti­ga­tion, and the sub­ject doesn’t co-op­er­ate, we have pow­ers un­der the act, in­clud­ing search and seizure.”

Par­lia­ment, which has over­sight of the reg­u­la­tor, should be deeply wor­ried about this creep­ing au­thor­i­tar­i­an­ism in an in­sti­tu­tion de­signed to pro­tect the dis­em­pow­ered. Solomon says par­lia­ment should ask if this is a sage use of tax­payer money.

“I’m not sorry about what I said,” she told the Fi­nan­cial Mail. “But I do worry that this sort of in­tim­i­da­tion means debt coun­sel­lors are too scared to speak out about things that aren’t right. Es­pe­cially when there’s al­ready lots of pres­sure on them to get cus­tomers to agree to things they shouldn’t.”

Mashapa, how­ever, ar­gues that the reg­u­la­tor has no op­tion but to use its rules to keep debt coun­sel­lors in line. “We have a duty to en­sure they re­spect govern­ment in­sti­tu­tions. If some­one says some­thing very neg­a­tive about us, what else can we do?”

Well, for starters, the NCR can start by not abus­ing its pow­ers to pro­tect the pin­prick-sen­si­tive egos of its frag­ile bosses. If the NCR were do­ing its job prop­erly, it would have no need to blud­geon crit­ics.

Reg­u­la­tor says the Na­tional Credit Act al­lows for search and seizure — which could vi­o­late the con­sti­tu­tion

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