Johannesburg - South African President Jacob Zuma said that while he has “full confidence” in his finance minister, he has no power to stop a police probe into allegations that Pravin Gordhan established an illicit investigative unit during his tenure as head of the national tax agency.
The presidency issued the statement after Gordhan refused a request by a special police investigative unit known as the Hawks to appear at its offices on Thursday for questioning, saying he had done nothing wrong.
The Sunday Times newspaper reported in May that Gordhan may face dismissal and arrest on espionage charges for setting up the so-called National Research Group within the tax agency to spy on politicians including Zuma.
Zuma’s comments are “clearly an attempt to assure the financial markets,” Ralph Mathekga, a political analyst at the Mapungubwe Institute of Strategic Reflection Johannesburg-based research organisation, said by phone. “The biggest question is whether the Hawks will carry on running amok after Zuma’s statement.”
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The rand gained for the first time in four days, strengthening 0.5 percent to 14.0865 per dollar at 12:28 p.m. in Johannesburg on Thursday after earlier reaching 13.9592. The yield on the benchmark rand bond due in 2026 fell five basis points to 9 percent, near the highest level since June.
Fractious relationship
Gordhan, 67, was named finance minister in December after Zuma roiled markets by firing Nhlanhla Nene from the position and replacing him with a little-known lawmaker. His relationship with Zuma has been a fractious one, with the president denying his requests to fire the nation’s tax chief for insubordination and appoint a new board at the state-owned airline.
“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 wrongdoing,” the Presidency said in a statement. “The negative effect of these matters on our economy, personal pressure on the individuals affected as well as the heads of institutions, however disturbing, cannot be cause for the president to intervene unconstitutionally.”
Read also: Gordhan: I have done nothing wrong
Hangwani Mulaudzi, a spokesman for the Hawks police unit, said he couldn’t immediately comment.
-With assistance from Paul Vecchiatto.
BLOOMBERG