Reserve Bank challenges public protector

SA RESERVE Bank governor Lesetja Kganyago filed an urgent application yesterday in the North Gauteng High Court to set aside remedial action proposed by public protector Busisiwe Mkhwebane in her report on the Bankorp bailout.

Earlier this month‚ Mkhwebane presented her findings regarding her investigation into the SA Reserve Bank’s assistance to Bankorp between 1985 and 1995.

Absa acquired Bankorp in April 1992. Mkhwebane wants the matter reopened to recover misappropriated public funds “unlawfully” given to Absa bank.

Absa maintained it met all its obligations in respect of the loan.

In her report, Mkhwebane said the South African government and the Reserve Bank had failed to protect the public interest by bailing out Bankorp.

She also recommended that parliament amend the constitution so that it stipulates that the Reserve Bank’s primary objectives include protecting citizens’ socioeconomic conditions.

The recommendations Mkhwebane made on the constitution attracted criticism from the business community and the ANC‚ all saying she overstepped the line. Parliament has already indicated it would take the public protector’s report on judicial review.

The SA Reserve Bank now wants the high court to set aside Mkhwebane’s recommendations as it says they are unlawful and not within her powers.

“The public protector has no power to amend the constitution‚ let alone instruct parliament to do so‚” Kganyago argued.

He said the Reserve Bank was given an autonomous role to protect the currency because its long-term stability might come into conflict with the government’s shorter-term goals.