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SARB had no authority to investigate Ramaphosa

South African Reserve Bank Governor, Lesetja Kganyago.

South African Reserve Bank Governor, Lesetja Kganyago.

Published Aug 27, 2023


The South African Reserve Bank's (SARB) authority and mandate to investigate President Cyril Ramaphosa over the Phala Phala scandal has been questioned.

The Hola Bon Renaissance Foundation (HBR) wants to know how the SARB was duly authorised and mandated to conduct an investigation on Ramaphosa.

HBR is a non-government organisation that aims to deepen and strengthen democracy in the country. It also aims to advance the socio-economic advancement and upliftment of the lives and well-being of people of South Africa and the continent.

The organisation said the SARB should not be authorised and mandated to investigate Ramaphosa because its treaty agreement has expired and was never renewed.

This after the reserve bank cleared Ramaphosa of any wrongdoing in its investigation into the millions of undisclosed foreign currency stolen from his Phala Phala farm in 2020.

In a statement released this week, the SARB said it could not conclude that there was any contravention of the Exchange Control Regulations due to a technicality, that money was exchanged and the agreements of the deal were not met.

“On the facts available to it, the SARB finds that there was no perfected transaction and 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 the 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 foreign currency,” read the statement.

However, the HBR said the reserve bank must furnish them with confirmation that the treaty agreement was still valid or not. The foundation also wants to know whether such a 99-year treaty between the government and the reserve bank was validated and extended after it expired.

“According to our information at hand, the treaty agreement has expired and was never renewed or extended hence the governing party with other parties in Parliament are proposing that the SARB be nationalised,” said chairperson Mothopeng Msieleng.

Msieleng added that the foundation has a reasonable belief that the investigation by SARB was never reported at the Federal Reserve Bank of the USA.

He said the decisions of the SARB to investigate Ramaphosa have not been tabled and reported to the shareholders for a special resolution. Msieleng said it appears that the decision was never endorsed by shareholders.

“And if so may we receive the shareholders’ minutes and the special resolution of the SARB to conduct such an investigation.”

The foundation has given SARB 72 hours to issue a treaty agreement and furnish them with a resolution to investigate Ramaphosa. It said this must include shareholder minutes, attendance register and resolution.

“Failure we shall be forced to institute legal actions against SARB since this is a constitutional matter.”

Asked to confirm receipt of the letter and comment, SARB spokesperson Thoraya Pandy said the reserve bank do not disclose correspondence that “we receive from anyone and don’t have any comment further” .

On Tuesday, the DA shadow minister of finance Dion George also wrote to reserve bank governor Lesetja Kganyago expressing their concerns about the findings against Ramaphosa.

In the letter, George said the SARB statement was completely silent on the apparent fact that foreign currency was actually in Ramaphosa’s possession.

“That is the crux of the matter, not whether the transaction was perfected or not. The status of the transaction cannot be the determinant, it is the possession of the currency. If the transaction status is considered the deciding factor, then the door is wide open to money laundering and foreign currency being held for lengthy periods pending transaction completion,” read the letter.

George added that the SARB should make the report available. He said a failure to make the report available will see the DA submitting an application in terms of the Promotion of Access to Information Act or approaching the court for relief.

The United Democratic Movement (UDM) also gave SARB seven days to publicly release its full report, citing that for the president to be held accountable for any illegal activities committed, the public should be given access to the report to make an informed decision.

In the meantime, political analyst Professor Sipho Seepe said the finding was mischievously written to allow plausible deniability by SARB. He said the reserve bank chose to ignore the fact that there was a substantial amount of money that was stashed.

“Not much has been covered regarding how much and how long people can hold foreign currency in their private spaces. What is concerning is the fact that it took the whole year for SARB to come out with its inconclusive statement. The fact that the transaction was not perfected was public knowledge. Why does it take SARB a whole year to repeat the obvious and to come out with a non-statement?” asked Seepe.

But another political analyst Professor Sethulego Matebesi “we” should commend the president for subjecting himself to the investigations. He said Ramaphosa could realistically have avoided such a level of scrutiny that could potentially remove him from office.

“Perhaps, opposition parties and those who are not satisfied with the SARB report should have stated from the outset that they will not accept anything other than a ‘liable’ or ‘guilty’ verdict from SARB.

“Overall though, opposition parties can be assured that reports on the conduct of public leaders, whether positive or negative, are some of the underlying reasons for low trust in the government or political leaders. Thus, even if the traditional opacity of SA’s decision-making processes plays a central role in the report of SARB, it is up to civil society to hold the president accountable,” said Matebesi.