The company in its founding affidavit deposed by its chief executive, John Stuart, said Mkhwebane’s work in investigating the industry had been below par.
“The final report is the product of fatal procedural irregularities and is riddled with material errors of law, material errors of fact, the reliance upon irrelevant considerations, the failure to have regard to relevant considerations and actions which exceed the scope of the public protector’s powers,” Phumelela argued.
“Phumelela further submits that the report is tainted with bias.”
Mkhwebane in May ordered the Gauteng Gambling Board to investigate state-owned assets bought by Phumelela “for a song” when the horse-racing industry was privatised in the 1990s.
Mkhwebane also wants the 50percent bookmakers’ levy, which is paid to Phumelela by the Gauteng Gambling Board, to be stopped and channelled to a new entity that will serve as the regulator for thoroughbred horse racing in the country.
The public protector also wants the Special Investigating Unit (SIU) to look into “unlawful appropriation or expenditure of public money or property” during the privatisation of the industry.
However, Phumelela said Mkhwebane’s recommendation that the SIU investigate the matter showed her misunderstanding of her powers, as “only the president has power” to direct SIU investigations.
The company went further and asked the court to order Mkhwebane to pay 25percent of the costs of the matter.
“I seek this order on the basis of her reckless and unreasonable disregard of basic legal principles, which the courts have laid down in a series of cases concerning the proper manner in which the public protector is required to exercise her powers.”
The investigation by Mkhwebane followed a complaint by businessperson Phindi Kema that a 1997 decision by the Gauteng government to privatise and restructure the horse-racing sector in the province was illegitimate.
Kema said the industry now relies on the government to defend the “unnecessary” review by the public protector and protect what belongs to South Africa.
“I find it inconceivable that a company that was illegitimately formed by the government and given public assets and annual levies in order to develop the sector, but creating the biggest implosion enriching about six shareholders, costing the industry 85000 jobs, reducing stud farms from 1482 to now 162, would take this hostile step when it has become evident that the company has gone against its very founders and founding principles by destroying the sector it was formed to develop,” Kema said.
Mkhwebane has received two stinging judgments against her after the court set aside her report into the Absa/Bankorp/SA Reserve Bank case, with Judge Cynthia Pretorius of the North Gauteng High Court ruling that: “In the matter before us, it transpired that the public protector does not fully understand her constitutional duty to be impartial and to perform her functions without fear, favour or prejudice.”
Her report into the Estina dairy matter was set aside by the same court, with adverse commentary on the public protector’s work.
The public protector’s spokesperson did not respond to questions from Business Report yesterday.