Business Day

Will watchdog keep on digging for bodies?

• Outgoing FIC director Murray Michell played a key role in exposing the Gupta shenanigan­s


The Financial Intelligen­ce Centre (FIC) is looking for a new director. The outgoing head, Murray Michell, will be leaving after more than 15 years when his contract is complete at the end of 2017.

In normal circumstan­ces, this sort of natural progressio­n would go relatively unnoticed, but given the FIC’s central role in the identifica­tion of financial crimes and the circumstan­ces we as a country find ourselves in, the appointmen­t of a new director requires the utmost scrutiny.

The primary mandate of the FIC is to identify the proceeds of crime and combat money laundering and terror financing.

Establishe­d in 2001, the centre plays a critical role in the economy because it acts as a nexus between the country’s business community, supervisor­y bodies, law enforcemen­t agencies and prosecutor­s.

In brief, financial institutio­ns and business are required by law to report any suspicious transactio­ns to the FIC when they see them.

In turn, the FIC collates the informatio­n and passes it on to the relevant bodies for prosecutio­n if necessary.

In an ideal world, this would be an efficient set-up, but if the disclosure­s of the past few weeks have shown us anything, it would be that financial crime is rampant in SA, and even those who are meant to uphold our financial systems — the likes of KPMG and McKinsey — are not immune to corruption by a small and powerful elite.

All of this reinforces the importance of an independen­t body such as the FIC to ensure financial crimes are not committed, and most importantl­y, that billions of rand that should be spent on schools, roads and hospitals don’t make their way across our borders, never to be seen again. It is here where the director of the FIC comes in.

To give you an example of the importance of the role, cast your mind back to October 2016 when then finance minister Pravin Gordhan submitted an applicatio­n to the High Court in Pretoria, requesting a declarator­y order that he was not legally permitted to intervene in the decision by the four big local banks to close the accounts of Oakbay Investment­s.

He alleged that representa­tives of the Gupta family had been putting pressure on him to force the banks to reopen their accounts, and wanted it to be stated publicly that, by law, he could not get involved.

This was all well and good, even if the motive was clearly political, but the real cracker was in the annexure to his applicatio­n, in which he included evidence compiled by the FIC of 72 irregular or suspicious transactio­ns totalling R6.8bn that were linked to Oakbay accounts or the Gupta family.

The man who signed off on this list of suspicious transactio­ns was Michell.

It might be hard to believe now, but looking back, this truly was the beginning of the end of the Gupta saga.

The closing of Oakbay-linked bank accounts earlier in the year was bad for the Guptas, but revealing that these accounts were linked to billions of rand in suspicious transactio­ns, many of which involved money leaving our shores, made it clear to everyone that this was about more than just creaming a bit off the top.

To be blunt, it became clear money laundering was involved, and the FIC was central to exposing that.

With this in mind, it is hard to imagine there is anyone else in SA who has a more thorough knowledge of the systems and extent of financial crime in SA than Michell.

As the head of the FIC since its inception, he knows where all the bodies are buried, so to speak, be they put there by the Guptas or others. And he will be gone by December.

Michell also works closely with internatio­nal anti-money laundering and financial crime organisati­ons, which as far as I understand, are in advanced stages of their investigat­ions into the financial behaviour of the Gupta family.

You don’t need to be a conspiracy theorist to wonder why, after so many years, one of the country’s most crucial individual­s in combating financial crime is choosing to leave his position now.

When I raised this concern with Treasury spokesman Mayihlome Tshwete, he made a very valid point: “There will never be a good time for someone as excellent as Murray to leave, and money laundering is always an important issue.

“We are confident that we can find someone who can uphold his standards of integrity and they will probably come from within the FIC itself.”

In response to my concern that the new director is appointed directly by the finance minister and is ultimately accountabl­e to the finance ministry, Tshwete was confident the existing procedures worked well and that the minister would not make a delinquent appointmen­t at the FIC. He pointed out that Gigaba’s other appointmen­ts — specifical­ly the Treasury director-general and South African Airways CEO – had been above board and put the right person in the job.

Although Tshwete said he had no idea why Michell had declined to renew his contract, he believed it would be unfair to expect anyone to stay in the same job indefinite­ly — no matter how valuable they were to the country.

He also quite rightly warned of placing too much importance on a single figure in an organisati­on: “Be careful of compromisi­ng institutio­ns and make them about an individual.

“This is an institutio­n that is full of people who have been there for decades and who will be able to carry on his work.”

I think this is an important point and it needs to be made clear that institutio­ns such as Treasury, the FIC and the Public Investment Corporatio­n are full of excellent individual­s who are as concerned as we are with the events taking place in SA.

These individual­s continue to work for the greater good — not for personal enrichment — and they require all of our support.

Still, I cannot pretend that I am not nervous over Michell being replaced at the FIC.

It is doubtful that we shall ever know for certain whether he jumped or was pushed – but I do know that, now more than ever, we need to be extra vigilant and scrutinise every senior public appointmen­t.


 ??  ??
 ?? Times /Sunday ?? Heading out: Financial Intelligen­ce Centre director Murray Michell has declined to renew his contract at the end of 2017, leaving the key position vulnerably open.
Times /Sunday Heading out: Financial Intelligen­ce Centre director Murray Michell has declined to renew his contract at the end of 2017, leaving the key position vulnerably open.

Newspapers in English

Newspapers from South Africa