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Cape Town – Finance Minister Malusi Gigaba will take the Public Protector’s report on ABSA and the South African Reserve Bank (SARB) on review for the reviewing and setting aside of the findings and remedial action in the report.
The Minister did not take this decision lightly, but did this to protect the constitutional mandate of the Reserve Bank, National Treasury said in a statement issued on Wednesday.
The basis for the review is that the remedial action proposed by Public Protector Busisiwe Mkwhebane breaches the principle of legality and the findings of fact are not necessarily adequately connected to the evidence which was before her.
Mkwhebane released her ABSA report late in June, ordering Absa to pay back a bailout of R1.125bn the SARB granted to Bankorp. In addition to the ABSA findings, she also ordered Parliament to amend the Constitution to change the SARB’s mandate of inflation targeting to one that is more pro-growth.
The SARB filed court papers to take Mkhwebane’s report on review, and ABSA filed an urgent application in support of the SARB's application, which has sought to review and set aside the Public Protector’s remedial action regarding her report on the Bankorp bailout that occurred during apartheid.
National Treasury said in its statement that Gigaba had met with the Public Protector to gain a “deeper understanding of the facts and evidence, which underpins some of the findings and conclusions against the Government”.
“This was necessary because the investigation preceded the Minister’s tenure in office.”
The discussions, according to Gigaba, were “cordial and insightful”.
“It became apparent that the Minister’s concerns about the report can only be practically addressed through judicial review proceedings. This was confirmed by the legal advice obtained by the Minister that the review is the appropriate course of action in light of the binding judgments of the Constitutional Court and the Supreme Court of Appeal,” the statement read.
“The Minister has not taken the decision to seek judicial review lightly. He has taken the decision primarily to protect the constitutional mandate of the South African Reserve Bank, an important institution created by the Constitution to 'protect the value of the currency in the interest of balanced and sustainable economic growth in the Republic'," the statement read.
“The Minister believes that the proposed constitutional amendment is not necessary. The Constitution does not contemplate the protection of the currency for its own sake, but specifically in the interest of balanced and sustainable economic growth. These two objectives of the Reserve Bank are mutually supportive and reinforcing.”
National Treasury said it is notable that the Public Protector report has generated a public discussion concerning the role of the Reserve Bank.
“The role of the Reserve Bank is a policy question. Its primary mandate is in the Constitution. There is no intention in the part of the executive to amend the Constitution in any manner.
“In any event, the first port of call for any policy changes would not be the Constitution, but the pre-constitutional legislation which governs the Reserve Bank, the South African Reserve Bank Act 90 of 1989.
On the recommendations by the Public Protector that the Special Investigating Unit should take steps to recover the “misappropriated public funds unlawfully given to ABSA Bank in the amount of R1.125bn” it is Gigaba’s view that he also needs to take this matter on judicial review, but that he is bound by decisions taken by his predecessors.
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