Zuma can’t intervene in Pravin Gordhan probe

SOUTH African President Jacob Zuma said yesterday he backs Finance Minister Pravin Gordhan but cannot intervene in a police investigation over a suspected spy unit at the tax service, signalling a prolonged tussle that could rock markets further.

The rand, which had tumbled 5 percent since Tuesday in response to the investigation, picked up yesterday and extended gains to 1.3 percent after Zuma’s statement, although analysts said the president had offered only qualified support.

News of Gordhan’s summons this week compounded investors’ worries about a power struggle between Zuma and Gordhan as Africa’s most industrialised economy teeters near recession and credit rating agencies consider downgrading it to “junk”.

The main opposition party called yesterday for a parliamentary debate into what it called a “witch-hunt” against Gordhan, who was in charge of the tax service when the unit under investigation was set up.

Investors and rating agencies back Gordhan’s plans to rein in government spending in an economy that has been forecast by the central bank to register no growth this year.

In his first public comments on the matter since it surfaced late on Tuesday, Zuma said he had noted the concerns by individuals and various organisations over the investigation. “President Jacob Zuma wishes to express his full support and confidence in the Minister of Finance and emphasises the fact that the minister has not been found guilty of any wrong doing,” the presidency said in a statement.

“The Presidency wishes to also emphasise that President Zuma does not have powers to stop any investigations into any individual/s.”

Gordhan said on Wednesday he had no legal obligation to obey a police summons linked to an investigation into whether he used the South African Revenue Service (SARS) to spy on politicians including Zuma.