SARB anticipated public protector’s report

THE SA Reserve Bank (SARB) yesterday moved to deepen Public Protector Busisiwe Mkhwebane’s woes, hitting her on two fronts.

The governor of SARB, Lesetja Kganyago, told Parliament that they knew as early as December that Mkhwebane would handle the investigation into the millions Absa received from the apartheid government as a bailout “badly”.

This was while a senior counsel representing the bank at the high court in Pretoria had a field day punching holes into Mkhwebane’s recommendations into the matter, saying she jumped the gun.

In Parliament, Kganyago told the standing committee on finance that the SARB remained an independent institution.

He said the application by Speaker Baleka Mbete to defend the independence of the SARB had emboldened them and was very important to their mandate.

The SARB’s mandate was to protect the value of the currency and ensure financial stability, Kganyago said.

He also told MPs that they had started preparing the papers for the high court months before Mkhwebane released her report in June that the mandate of the bank be changed.

This was after they got wind of this in the media.

“We suspected in December, when the first draft report was leaked, that this matter would be handled badly.

“We felt we were under attack, that we had to defend this institution.”

Kganyago said investors and central bank governors across the world continued to be jittery about South Africa’s policy uncertainty.

In the high court, Mkhwebane’s recommendations came under fire from the SARB’s senior counsel, advocate David Unterhalter, who said she had overstepped her mark in the report.

Mkhwebane, in her June 19 report on Bankorp’s apartheid bailout amounting to billions of rand, had recommended that the mandate of the SARB to target inflation at 3% and 6% must be changed and rather focus on the “socio-economic well-being of citizens”.

Unterhalter argued that the recommendation had a negative effect on the economy as the rand immediately took a knock amid fears that National Treasury’s decisions could become more politically inclined.

There were also threats that the country’s economy could be further downgraded into junk status.

While Unterhalter acknowledged that Mkhwebane’s powers were “important,” he also noted that they were always subject to the constitution.

The public protector’s remedial actions are legally binding, but she has said she would not oppose SARB’s application, which Unterhalter said was urgent.

Judge Murphy reserved judgment. He would hand it down on or before August 18.

Deputy governor of the SARB Kuben Naidoo meanwhile said they were continuing to fight illicit financial flows.

He said their blood boiled each time they heard these stories.

The Guptas have been accused of illegally shipping funds out of the country.

MPs said the billions of rand being reported to be shifted to Dubai must be probed.

They called for co-ordination in the fight against illicit financial flows.

Floyd Shivambu of the EFF said the SARB must work with the National Prosecuting Authority, the SAPS and the Financial Intelligence Centre to deal with the problem.

We felt we were under attack, that we had to defend this institution