The SA Reserve Bank (SARB) on Tuesday moved to deepen Public Protector Busisiwe Mkhwebane’s woes, hitting her on two fronts.
Governor Lesetja Kganyago told Parliament that SARB knew as early as December that Mkhwebane would handle "badly" the investigation into billions of rand Absa received from the apartheid-era government as a bailout “badly”.
This was while a senior counsel representing the bank at the high court in Pretoria had a field day, punching holes into Mkhwebane’s recommendations into the matter, saying she jumped the gun.
In Parliament on Tuesday, Kganyago told the standing committee on finance that the SARB remained an independent institution.
He said the application by Speaker Baleka Mbete to defend the independence of the central bank had emboldened them and was very important to its mandate.
The SARB’s mandate was to protect the value of the currency and ensure financial stability, Kganyago said.
He told MPs that they had started preparing the papers for the high court months before Mkhwebane released her report in June that the mandate of the bank be changed.
This was after they got wind of this in the media. We suspected in December when the first draft report was leaked that this matter will be handled badly.
“We felt we were under attack, that we had to defend this institution,” he said.
Kganyago said investors and central bank governors across the world continued to be jittery about South Africa’s policy uncertainty.
In the high court, Mkhwebane’s recommendations came under fire from the Reserve Bank senior counsel advocate David Unterhalter, who said she had overstepped her mark in the report.
Mkhwebane, in her June 19 report on Bankorp’s apartheid bailout amounting to billions of rand, had recommended that the mandate of the Reserve Bank to target inflation at 3%-6% must be changed and rather focus it on “socio-economic well-being of citizens”.
Unterhalter argued that the recommendation had a negative effect on the economy as the rand immediately took a knock amid fears that the National Treasury’s decisions could become more politically inclined.
There were also threats that the country’s economy could be further downgraded.
While Unterhalter acknowledged that Mkhwebane’s powers were “important”, he also noted that they were always subject to the constitution.
The public protector’s remedial actions are legally binding, but she has said she would not oppose SARB’s application, which Unterhalter said was urgent.
Judge John Murphy reserved judgment. He would hand it down on or before August 18.
Sarb deputy governor Kuben Naidoo said they were continuing to fight illicit financial flows.
He said their blood boiled each time they heard about these stories.
The Guptas have been accused of illegally shipping funds out of the country.
MPs said the billions being reported to be shifted to Dubai must be probed.
EFF’s Floyd Shivambu said SARB must work with the National Prosecuting Authority, SAPS and the Financial Intelligence Centre on the matter.
When contacted for comment last night, Mkhwebane’s spokesperson, Cleopatra Mosana, said they would await the outcome of the judgment.