Money
TYI 0

UPDATE #1:

The South African Reserve Bank (Sarb) said on Tuesday that the Public Protector had no powers to direct Parliament to effect a Constitutional amendment to the powers of the Reserve Bank, saying that it would challenge her findings.

This comes after Public Protector Busisiwe Mmkhwebane on Monday criticised Sarb for failing to recover more than R1 billion from Bankorp Limited/ABSA Bank which was advanced as an “illegal gift” to the Bankorp group, which was bought by ABSA in the early 1990s.

Mkhwebane released a report on the alleged failure to recover “misappropriated funds” in the erstwhile Bankorp lifeboat investigation.

She referred the matter to the Special Investigating Unit, which must in turn approach President Jacob Zuma to reopen the presidential proclamation R47 of 1998 “in order to recover the misappropriated public funds unlawfully given to ABSA Bank in the amount of R1.125 billion”.

She further ordered remedial action directing Parliament to effect a constitutional amendment to the Reserve Bank’s powers.

Related article: Where is the public protector?

Mkhwebane’s recommended remedial action had an immediate and negative impact on the markets and the exchange rate of the rand.

In a statement on Tuesday, Sarb said the amendment would, if effected, strip the bank of its key competency to protect the value of the currency and the well understood role that central banks play in securing price stability.

Sarb said the remedial action proposed would have a negative impact on its independence.

“The Reserve Bank has consulted its legal team and has been advised that the remedial action prescribed by the Public Protector falls outside her powers and is unlawful,” Sarb said.

“The Reserve Bank has been advised to bring urgent review proceedings to have the remedial action set aside. The Reserve Bank has resolved to do so.”

Sarb said it would address its other concerns with the report and “evidential factual inaccuracies” therein, at the appropriate time. The bank said it acted in terms of its constitutional mandate in the interests of the welfare of all South Africans.

UPDATE #2:

The African National Women’s League (ANCWL) has welcomed the Public Protector report which instructs the Special Investigating Unit (SIU) to recover misappropriated public funds given to ABSA totalling over R1 billion.

On Monday, Public Protector Busisiwe Mkhwebane criticised government and the South African Reserve Bank (SARB) for failing to recover more than one billion rand from Bankorp Limited/ABSA Bank advanced as an “illegal gift” to the Bankorp group, which was bought by ABSA in the early 1990s.

“The allegation whether the South African government and the Reserve Bank improperly failed to recover from Bankorp Limited/ABSA Bank an amount of R3, 2 billion cited on the CIEX report, owed as a result of an illegal gift given to Bankorp Limited/ABSA Bank between 1986 and 1995 is substantiated,” Mkhwebane told a media briefing in Pretoria.

“The correct amount of the illegal gift granted to Bankorp Limited/ABSA Bank is in the amount of R1,125 billion.”

Late on Monday night, the ANCWL said it had been consistently calling for the release of all reports related to the so-called CIEX investigation in order for South Africans to find closure on the matter.

“The ANCWL calls for government departments and all State-owned entities doing business with ABSA to terminate their contracts with ABSA with immediate effect. Government and its entities cannot continue to give business to the same ABSA who has failed to repay the loan from the South African Reserve Bank.

“Whilst the ANCWL welcomes the findings of the Public Protector on ABSA, we appeal for further probe to recover all the monies allegedly stolen by the Apartheid government and its cronies which has left South Africa bankrupted,” the statement added. “The ANCWL believes that those funds have to be recovered and used for the development of the prosperous country.”

Mkhwebane on Monday had said that the South African populace had been prejudiced by government’s failure to recoup those huge sums of money.

“The amount given to Bankorp Limited/ABSA Bank belonged to the people of South Africa. Failure to recover the ‘gift’ resulted in prejudice to the people of South Africa as the public funds could have benefited the broader society instead of a handful of shareholders of Bankorp Limited/ABSA Bank,” she said.

“The conduct of the South African government and the South African Reserve Bank goes against the ethos laid out in the preamble of the Constitution and section 195 of the Constitution in respect of redressing social injustices and promoting efficiency.”

Mkhwebane said the conduct of government and the SARB constituted “improper conduct and maladministration”.

For remedial action, Mkhwebane has referred the matter to the Special Investigating Unit, which must in turn approach President Jacob Zuma to reopen the presidential proclamation R47 of 1998 “in order to recover the misappropriated public funds unlawfully given to ABSA Bank in the amount of R1.125 billion”.

The Public Protector probed allegations that CIEX, a United Kingdom-based asset recovery agency headed by Michael Oatley, was contracted by Pretoria to assist in investigating and recovering misappropriated public funds and assets allegedly committed during the reign of the apartheid regime.

“The allegation whether the South African government improperly failed to implement the CIEX report … after commissioning and duly paying for same is substantiated. CIEX Limited was paid 600,000 British Pounds for services which were never used by the South African government. No evidence could be found that any action was taken specifically in pursuit of the CIEX report,” Mkhwebane found.

– Sourced from ANA

Tags:
Categories: Money