Reserve Bank's Phala Phala findings leave million dollar questions

President Cyril Ramaphosa

President Cyril Ramaphosa

Published Aug 22, 2023


Opposition parties have rejected the findings of the South African Reserve Bank (SARB) into the Phala Phala saga, saying it was an attempt to “cleanse” President Cyril Ramaphosa who this week will chair the BRICS Summit in Johannesburg.

SARB found no evidence that a sale was concluded and no exchange control regulations were contravened, following complaints relating to the stolen millions of rand (in US dollars) concealed in couches at Ramaphosa’s Phala Phala farm in 2020.

No criminal case was opened and Ramaphosa only spoke out about the incident after former head of the State Security Agency Arthur Fraser lodged a criminal complaint against him.

Fraser claimed that Ramaphosa did not report the crime as legally required by public officials, and cited money laundering, given the amount of foreign currency in cash.

In March this year, the SA Revenue Service (Sars) said a tax compliance statement indicated that the $4 million sale of the game at Ramaphosa’s Phala Phala farm in 2020 had been declared.

After complaints were lodged, SARB said on Monday it had finalised its investigation into the matter, but the report would not be made public as it was a “private internal report”.

“On the facts available to it, the SARB finds that there was no perfected transaction and thus the SARB cannot conclude that there was any contravention of the Exchange Control Regulations (the applicable Regulation is Regulation 6[1]) by Ntaba Nyoni Estates CC (the entity involved) or for that matter by the president. That is because SARB has concluded that the transaction in question was subject to conditions precedent which were not fulfilled, and therefore there was no legal entitlement, within the meaning of Regulation (6)(1), on the part of Ntaba Nyoni Estates CC, to the foreign currency. The governor will provide feedback within the applicable legal constraints to Parliament during SARB’s upcoming engagement with Parliament.”

The regulation in question states that every resident in the country who becomes entitled to sell or to procure the sale of any foreign currency, shall within 30 days after becoming so entitled, make or cause to be made, a declaration in writing of the foreign currency to the Treasury or to an authorised dealer.

The EFF, who had been one of the complainants, said they rejected the report with contempt.

“The question South Africans should ask themselves is, if there was no ‘perfected’ transaction, then why was the transaction registered in the books of Ntaba Nyoni Estates CC and how did SARS determine that Ntaba Nyoni, which is solely controlled by Ramaphosa, is tax compliant? Additionally, all law-abiding citizens should ask themselves, if ‘no perfected transaction’ was performed, then why was there $580 000 stashed in Phala Phala Farm, and for what purpose was it?

“In their pathetic and poor attempt to cleanse Ramaphosa of the Phala Phala crimes, SARB has unwittingly confirmed our suspicions that there was never a transaction or intention to have a legal transaction. Instead, the intention was to launder money through Phala Phala, as we have consistently maintained that Ramaphosa uses his farming business as a front for money laundering,” the EFF said.

The African Transformation Movement (ATM) said Ramaphosa’s foreign currency, which he received from the sale of game in 2019, was in the country illegally.

“Additionally, the assertion made by SARB that there was no ‘perfected transaction’ appears to be a strained interpretation of the law. This interpretation seemingly seeks to create loopholes in order to shield the president from the consequences of his actions. Such a stance undermines the very essence of regulatory oversight.”

DA spokesperson on finance Dion George said the fact that SARB would not release the full “private internal” report raised questions about transparency and accountability.

“The Reserve Bank’s finding hinges on the absence of a ‘perfected transaction’, which means that the legal prerequisites for the transaction to be completed were not met.

Specifically, the conditions for a perfected transaction were unfulfilled due to the non-delivery of a buffalo to the infamous businessman Hazim Mustafa. This led to the Reserve Bank’s conclusion that there was no legal obligation under the exchange control regulations of 1961 to declare the foreign currency.

“However, the suspicious circumstance of the money being stuffed into the president’s couch, and the possibility that cash was held beyond a legislated limit, seem to have been beyond the scope of the Reserve Bank’s investigation.

The narrow focus of its investigation also raises concerns about its thoroughness and whether any political considerations arose.”

While the Presidency would only say it noted the completion of the Phala Phala investigation and the subsequent findings, the ANC said the determination that Ramaphosa did not violate any exchange control regulations was “unambiguous and definitive”.

“The ANC expresses its satisfaction with this conclusion and anticipates that all baseless accusations will be dispelled. The process followed with subsequent findings by the Reserve Bank vindicates our view that South Africa is a robust democracy with resilient oversight and regulatory institutions.”

Cape Times