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Gordhan was right, ministers can’t force banks to act - judgment

Aug 18 2017 11:40
Matthew le Cordeur

Cape Town – Former finance minister Pravin Gordhan was legally correct not to intervene on behalf of the Guptas, whose bank accounts had been blacklisted by South Africa’s top four banks.

The North Gauteng High Court ruled on Friday that there are no laws that allow a minister to intervene in a private bank-client dispute.

“There is no statute that empowers a member of the national executive such as the minister, to intervene in a private bank-client dispute,” said Judge Aubrey Ledwaba, who read out the order. “Neither does the Constitution confer such powers.”

While Ledwaba said the court dismissed Gordhan’s case with costs, the judgment does clarify the finance minister’s legal position.

During April 2016, Oakbay announced that its bank accounts had been closed by the South African banks with which it held bank accounts and which were concerned about the possibility of money laundering transactions passing through their accounts.

On April 8 2016, Oakbay approached Gordhan, demanding his intervention to reverse this decision. The Gupta companies were of the view that Gordhan had the power to intervene with the banks.

Gordhan then applied to the North Gauteng High Court in October 2016 seeking a declaration that he could not intervene in the dispute.

However, Ledwaba said the court viewed the application by the minister as "unnecessary".

"We hold the strong view that this application was clearly unnecessary in the circumstances of this case. Such circumstances do not warrant that the court exercises its discretion to grant the declaratory relief by pronouncing itself on an undisputed legal question, which has previously been confirmed in judgments.

"It is not appropriate for a member of the National Executive to draw the judiciary into the exercise of his executive functions as evidenced in this application," the judgment read.

"To grant the minister the declaratory relief would allow the judiciary to stray into the exercise of executive functions where the circumstances do not warrant this involvement."

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