‘Take your car and go answer’
FIRST TO SUFFER, STILL VOLATILE AS HAWKS POISE TO SWOOP
According to United Democratic Movement’s Bantu Holomisa, there’s no need for Pravin Gordhan to consult his legal advisers.
Speaking to broadcaster eNCA yesterday, Holomisa said his party would like to see the saga over the so-called Sars rogue unit that Gordhan is alleged to have established to spy on prominent leaders while also running a brothel, finalised as soon as possible.
The allegations about the brothel and the illegal nature of the unit have already largely been discredited, with the newspaper that published the allegations retracting most of its stories.
“The benefit of doubt should be given to the investigators. I don’t dismiss the views of other people but no one is above the law. He should avail himself – there’s not a need to consult legal advisers or that nonsense,” Holomisa said.
He said news of the Hawks pursuing Gordhan had created uncertainty and raised too many questions about President Jacob Zuma’s possible meddling in the unit’s investigations.
“He must just take his car, go and answer the questions, and then after that let the Hawks proceed with their investigations.” –
Gordhan is seen as one of the few remaining gatekeepers of political integrity. The latest Hawks action is seen as another attempt to remove him from his post.
Plunge by currency underlines high regard in which investors view Gordhan.
The possible overreaction of the rand shows how much the market distrusts the motives of the Hawks in its effort to question, or even arrest, Finance Minister Pravin Gordhan.
The rand plunged nearly 3% to R13.92 to the dollar on the news on Tuesday evening, sinking to a three-week low. Yesterday the currency shed another 1.5% against the dollar, trading at R14.20 by 5pm.
It is not the first knee-jerk devaluation of the rand.
Since December last year, there have seen several of these sharp falls following apparent renewed efforts to question Gordhan regarding the alleged South African Revenue Service’s (Sars) “rogue unit” which operated during his tenure as commissioner.
This politically induced volatility of the exchange rate, in addition to international developments, contributed to the rand’s most volatile period in many years. In most cases, the rand did recover from the political shocks and returned to market-based valuations.
The latest alleged directive from the Hawks, that Gordhan must report to the unit today, came as a big surprise. It follows Gordhan’s answering of the famous 27 questions sent to him days before his budget speech in February.
The latest steps surely suggest that the Hawks are not entirely satisfied with the information Gordhan presented and that he may indeed be arrested – a step that may have an even more pronounced impact on the rand than “Nenegate” itself.
The market’s reaction to the latest moves by the Hawks, underlines the massive distrust in the motives of the unit and potential hidden agendas. It is seen as an attempt to eject Gordhan from his position due to some dishonourable plan and this overshadows the scenario where Gordhan has something to answer to.
This is not a hypocritical view, as numerous events have tainted the integrity of President Jacob Zuma, which is indirectly linked to the saga. Several scandals such as Nkandla, the non-prosecution of 783 corruption charges (by the Hawks), Omar al-Bashir and issues like “Guptagate”, have created perceptions that Zuma acts mainly in self-interest and that the Gordhan prosecution is a case in point.
In stark contrast, Gordhan is seen as one of the few remaining gatekeepers of political integrity. The latest Hawks action is seen as another attempt to remove him from his post as finance minister to benefit Zuma and company.
The context of the latest developments is also extremely complicated. Remember, Gordhan is not Zuma’s preferred finance minister. Zuma removed Gordhan from his position in May 2015 when Nhlanhla Nene was appointed as the head of National Treasury.
Nene was highly respected and his appointment did not spook the markets. Gordhan was also moved to lead the ministry of cooperative governance and traditional affairs – a department that needed definitive leadership.
Gordhan’s return to Treasury happened in a matter of days, when he was reappointed as finance minister after the Nenegate fallout – an action that was perceived as an effort from Zuma to capture South Africa’s purse. Gordhan’s appointment also followed heated exchanges between Zuma and the ANC leadership, as well as prominent business people.
His appointment was, therefore, a compromise by Zuma – a compromise that has now become a problem.
In the months that followed, Gordhan did not disappoint. He took action to calm ratings agencies and openly criticised Zuma cronies and questioned massive procurement programmes such as the nuclear build programmes.
Unfortunately, the outcome is not destined to be a positive one. Any action against Gordhan will spook the markets even further. – Moneyweb