28 Mar 2017
Quick take on the day’s events from political analyst Daniel Silke:
South Africa sits at the edge of yet another politically-induced crisis relating to the position of her Finance Minister and prudent economic management of the economy. Pravin Gordhan is clearly under extreme pressure. Should he survive,he will have to elicit the support of key members of the NEC's top 6 and perhaps, Deputy President Cyril Ramaphosa.
If this group is not prepared to draw a line in the political sand, his position may be untenable.
What is at stake is the economic credibility of the country precisely at a time when growth looked set to show some green shoots, the currency had strengthened and there was a moderate uptick in business confidence. The country can barely afford another round of politically induced risk to influence her core economic indicators.
Whatever the eventual outcome of this unedifying set of events which once again pit the interests of the country against the vested interests supporting factions within the ANC, South Africa will be under pressure to regain the momentum she was just beginning to secure.
28 Mar 2017
Zuma's threat to Gordhan can't be shrugged off
Investors have been roiled by President Jacob Zuma's threat to fire Finance Minister Pravin Gordhan.
The rand sank by almost 3% and yields on the country's benchmark 10-year bond jumped by as much as 30 basis points on Tuesday after Bloomberg News reported that Zuma had told allies he planned to fire Gordhan. But, within the course of the morning, investors were starting to pare those losses.
By recalling Gordhan in the midst of a high profile international roadshow with investors, Zuma has sent an unmistakable and profoundly negative signal about South Africa's attractiveness as a place to invest.
28 Mar 2017
In other news related to the country’s finance institutions, SARS boss Tom Moyane charged that Judge Dennis Davis who heads up the Davis Tax Committee has attacked and affronted the Revenue Service and therefore there has been a breakdown in trust.
SARS briefed the standing committee on finance in Parliament on the organisation’s quarterly report ended 31 December, while Moyane responded to a number of burning questions from members of Parliament.
David Maynier, Democratic Alliance shadow minister of finance, asked
Moyane to respond to a number of issues, such as his earlier statement that
Davis was no longer fit to serve on the specialist tax committee.
Maynier put it to Moyane that the “breakdown of trust” between SARS and Davis was due to the Revenue Service resisting an investigation by the committee into SARS’ systems and operations.
“You’re resisting the Committee’s investigation into tax administration. For a period of several months they’ve (the committee) tried to make contact with you so that the investigation can proceed.”
Moyane categorically denied this, saying any allegations that it has
hindered or resisted an investigation are simply untrue. – Liesl Peyper
28 Mar 2017
Cape Town - Finance Minister Pravin Gordhan arrived at the North Gauteng High Court in Pretoria with an entourage from Treasury.
This is seen as a strong show of support for Gordhan, whose legal team is facing off with 14 Gupta-owned companies over the blacklisting of their bank accounts by South Africa’s top four banks.
Gordhan is seeking a declaratory order to protect the Treasury’s executive from having to intervene in the closure of the Guptas’ bank account by the country’s top four banks.
28 Mar 2017
In other Gordhan-related news SARS boss Tom Moyane has lashed out at critics of the Revenue Service, telling Parliament on Tuesday that the unwarranted attacks on the organisation are having a negative impact on the confidence of taxpayers.
“We’ve seen a disturbing trend – tax compliance levels are beginning to deteriorate and we’re already in a dire economic situation that negatively impacts on our collection ability.”
Briefing Parliament’s standing committee on finance on its quarterly performance at the end of December 2016, Moyane came out guns blazing against those who criticise SARS, implying that the revenue collector is unable to fulfil its functions.
“So much has been said about SARS,” Moyane said, “and it’s extremely damaging to us as a leading government agency.”
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Maleka speaks about the role of the president in the matter.
The relief Standard Bank seeks logically extends from the relief the minister seeks.
28 Mar 2017
Back in court, Standard Bank arguing their case.
Adv Maleka for Standard
Bank: Courts are the only institution that can resolve this application.
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Gauntlett: for a declaratory order - in modern law there need not be dispute. In this case there was considerable disput
Secondly, there need not be an opponent.
Third, there need to be interested parties, who will be bound by the matter.
Finally the issue must not be abstract.
Gauntlett says these requirements have been met.
28 Mar 2017
Political risks once again plays into value of the rand going forward, economic analyst Daniel Silke told Fin24.
Anything that looks like a disrupting status quo of fiscal stability in South Africa, or political interference in the Treasury will have a negative effect on the rand.
While the rand has declined [by 3% overnight, and more on Tuesday to trade at R12.95/$ currently], it is still a currency that remains more buoyant than it was a year ago.
28 Mar 2017
What Gordhan's team is arguing is that "nothing in the Constitution, the Public Finance Management Act, the Banks Act or any other legislation, regulation or common law authority authorises ministerial intervention.
The Reserve Bank itself confirms that the same applies to it: there is no legal provision which entitles the Reserve Bank to interfere in the relationship between banks and their clients.
The Registrar of Banks similarly confirms the same in respect of himself.
A fortiori, then, the same should apply to the Minister of Finance, because if the primary regulator has no power of intervention then the political head overseeing the entire financial sector will have even less legal authority to do so.
It wants the court to agree on this. However, while the Guptas agree with this, they want Gordhan to pay costs and/or drop the case, because they believe it is a moot point.
28 Mar 2017
Gordhan lawyers say NO DEAL
Jeremy Gauntlett: I regret that the position remains as far as we have it. There is not a party that considers that the framing of the minister’s power and motion of law. There are consequential issues of cost.
Oakbay and Gordhan lawyers met for an hour from 2pm to determine whether they could settle, but this failed.
28 Mar 2017
Oakbay and Gupta lawyer, Gert van der Merwe, tells Fin24's Matthew le Cordeur Finance Minister Pravin Gordhan should drop the case.
"Gordhan should not proceed with the application," he says.
"The minister knew very well that
the relief is not necessary since everybody agreed on it. We opposed because of
the frivolous allegations made in the paper."
28 Mar 2017
Oakbay and Gupta lawyer, Gert van der Merwe, speaks to Fin24's Matthew le Cordeur: "We are very relieved by the outcome. We completely agree with the rulings of the judges. I think it takes out a huge political sting," he says.
"In particular, the judges determined that the reference to the FIC certificate is now struck from the papers. And similarly, any reference to the Jonas, or the alleged Jonas meeting is struck from the papers so we are very relieved with that."
28 Mar 2017
Pretoria – It’s not too late for Finance Minister Pravin Gordhan and Oakbay to settle, the North Gauteng High Court heard on Tuesday.
Judge President Dunstan Mlambo will meet the legal counsel of the different respondents which includes 14 companies owned by the Guptas, National Treasury, the Reserve Bank governor, the FIC director, the registrar of Banks, Standard Bank, Nedbank, Absa and FNB.
Mlambo
made a ruling on the strike out
applications by Oakbay, Gordhan and Sahara computers before adjourning
court proceedings into the case where Gordhan is seeking protection from
intervening in the banks' decision to close the bank accounts of
Oakbay. - Lameez Omarjee and Matthew le Cordeur
28 Mar 2017
28 Mar 2017
Johannesburg - Finance Minister Pravin Gordhan said foreign investors showed great faith in the economy while he was in London, adding that there are many people in government who also want to make sure the economy is on track.
President Jacob Zuma ordered Gordhan to cancel meetings with investors in the UK and the US and return home on Monday, a day after he flew to London to begin the week-long roadshow.
Zuma told senior leaders of the South African Communist Party that he plans to fire Gordhan, according to three people with knowledge of the matter. The rand plummeted.
Asked about reports that he may be fired after he landed, Gordhan said: “I’ve just landed so let’s wait and see.” - Bloomberg