Tito Mboweni warns Public Protector not to interfere with SARB

Cape Town – Former South African Reserve Bank (SARB) governor Tito Mboweni on Tuesday warned Public Protector Busisiwe Mkhwebane not to interfere in the independence of the bank.

One of Mkhwebane’s remedial actions in her CIEX Report on Monday was for Parliament to initiate a process to amend the Constitution, which would remove a paragraph that gives SARB its mandate to protect the value of the rand.

The SARB announced on Tuesday that it is obtaining an urgent legal review of what it believes is unlawful action by Mkhwebane.

READ: SARB seeks urgent court review to set aside Public Protector’s ‘unlawful’ action

One of the central tasks of SARB “is to protect the stability of the banking and financial system of the economies in which they operate", Mboweni posted on his Facebook profile on Tuesday.

He said that, to fulfil this mandate, central banks have to assess the negative impact of bank failures.

“This is a huge responsibility, which must be approached with extreme care,” he said. “Political considerations have to be considered, yes, but they must not be above all else."

DANIEL SILKE: Public Protector creates useful diversion for a state under siege

Mboweni said when the Constitution was written, the central objective of SARB was a “long drawn negotiation process”.

“It is unwise to try and change this at the slightest political provocation,” he said. “It is a very serious matter for our beloved country."

READ: Governor strikes back: SARB has duty to protect rand

“Please think carefully about this,” he said. “I hope the Public Protector has consulted widely about her proposals in this regard.

“One cannot just take this for granted. This is too fundamental to be treated this easily. The impact of any proposed changes are huge for our country. In any case, one requires a huge majority in Parliament to effect the suggested Constitutional changes, which no party in Parliament currently commands.

“My suggestion is that all political parties must carefully discuss the ramifications of the Public Protector’s recommendation in this regard.

Mboweni: Did Public Protector find Davis Report too complex?

Mboweni, who was SARB governor from 1999 to 2009, commissioned Judge Dennis Davis in 2000 to investigate the SARB’s bailout of Bankorp in 1985. This followed another investigation Special Investigating Unit head former Judge Willem Heath in 1999.

Both judges concluded that the bailout broke the law. Heath recommended not to pursue the money, while Davis said the shareholders of Bankorp (88% were Sanlam policy holders and 12% was Absa) should pay. “The R1.23bn Absa paid was split between these parties,” Absa explained.

“As soon as I assumed the office of Governor of the SA Reserve Bank, I instituted an independent investigation headed by a judge (Davis).

“It comprised of a panel of highly qualified people in economics, finance, accounting and political complexities, black and white with international expertise.

“Their report was also submitted to the Public Protector,” he said. “This report, it would seem, at reading the media reports, was ignored or might have been complex. I do not want to be judgemental.”

“On the basis of that report, and its recommendations, the matter was concluded,” he said. “Yes, I must admit, that a different panel might have come to a different conclusion as these matters normally are the case.

“But to cast negative judgement on their genuine professional work is both ingenious and unfair. It might be impugning on their professional standing in their professions, society and capabilities.”

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