Tuesday, October 11, 2016

Support Pours in for Pravin Gordhan After News of Fraud Charges
Business Day Live
OCTOBER 11 2016, 13:24

Support has poured in from various quarters for Finance Minister Pravin Gordhan, on news that he is to be charged with fraud.

While the ANC called on him to co-operate fully with the National Prosecuting Authority (NPA), Gauteng Premier David Makhura threw his weight behind Gordhan, as did prominent business representatives.

Civil society organisations, meanwhile, raised concern about the fallout for key institutions of governance in SA, and urged that Gordhan should be left in his post as finance minister.

As talk of a possible Cabinet reshuffle intensified following the NPA announcement, the South African Chamber of Commerce and Industry (Sacci) CEO Alan Mukoki said: “A reshuffle is the prerogative of the President but our advice … is that in the current climate if you are going to reshuffle you have to be careful … and put someone who can rally markets, inspire confidence, send the message that there is no state capture and that fiscal discipline is going to continue.”

The ANC said the probe into SARS and “related, untested and mischievous ‘conspiracy theories’” had had a “detrimental effect” on the South African economy. It expressed the hope that the NPA’s announcement would lead to the truth being uncovered and put the matter to rest.

ANC spokesperson Zizi Kodwa said: “We welcome today’s remarks by the head of the NPA, advocate Shaun Abrahams, rejecting claims of political interference in the prosecutorial process.

“The ANC urges all parties, as well as external stakeholders, to allow the law to take its course.

“The ANC further urges Comrade Pravin Gordhan and others to fully co-operate with the NPA in order to bring this matter to finality as soon as possible.

“The presumption of innocence until proven guilty remains a sacrosanct principle of our law, and the ANC has full confidence in our judiciary to act as final arbiters in these matters.”

The ANC also called on all parties to “desist” from making public comments that would “undermine due process and create further confusion”.

But Makhura said at an open tender seminar in Midrand, where Gordhan was speaking when the news of the charges broke: “I would like to take this opportunity to say something to you minister Gordhan, I as the Premier of [the] Gauteng province on behalf of the government that I lead without of fear of contradiction, we believe in your leadership, we believe in your ethical leadership”

Gordhan received a standing ovation from participants at the seminar after he delivered his speech in which he applauded the Gauteng government for opening up its tender processes.

Makhura told Gordhan not to lose strength as he dealt with the legal matter, and to use is energy to continue to help SA’s economy recover.

“We trust as you go through this you will feel our weight as well, you won’t just feel the burden of the responsibilities you were given as the minister of finance.

“The truth will come out, the truth is too strong to be kept secret … the truth will be transparent and soon thank you very much for blessing us with your presence,” said Makhura.

His statement prompted more applause and cheers from the crowd.

Business reacts

Business Unity SA (Busa), one of SA’s biggest business organisations, said that while it respected institutions of law, it was confident in Gordhan.

He should be considered innocent until proven guilty, Busa said.

“As Busa we respect the institutions that have been set up by the Constitution and we allow them to do their work without us second-guessing why they have made such decisions but we also know that somebody is innocent until proven guilty. So we will wait to see how the process unfolds,” Busa CEO Khanyisile Kweyama said in an interview on Tuesday.

Busa said it remained confident in the finance minister. “We also want to reiterate our confidence in Gordhan and the work he has been doing with business to avert a ratings downgrade, stabilise the economy and stimulate job creation particularly for the youth,” Kweyama said.

“We have been working with him on that and he has just come back with business leaders from a road show to avoid the downgrade.

“We are concerned that he has to be dealing with this (case) at this time,” said Kweyama.

Gordhan and business leaders were recently in London and New York trying to woo investors and to avert a downgrade.

The rand weakened more than 3% against the dollar and the JSE’s banking index dropped by the same amount as National Director of Public Prosecutions Shaun Abrahams began making the announcement on Tuesday.

The Banking Association of SA said it was “fundamentally concerned with the timing” of the decision to charge Gordhan.

The decision comes just 15 days before Gordhan is scheduled to deliver the medium-term budget policy statement and less than two months before SA’s credit ratings are reviewed.

The association’s MD, Cas Coovadia, reiterated that the law had to take its course but said proceedings had to be handled in an appropriate and responsible manner. This was so that it would not unduly and negatively affect the economy and what Gordhan had achieved to date to restore investor confidence and take concrete measures to reignite economic growth.

Coovadia also reiterated the association’s support for Gordhan.

“Based on our engagements and interactions with Gordhan and Treasury under his leadership, we remain confident in him and the team and reaffirm our support for both the abilities of Gordhan and Treasury,” said Coovadia.

The Chamber of Mines said it was deeply concerned about the state of public institutions in South Africa and will raise the matter with the Presidency.

“The Chamber’s view is that no individual is above the rule of the law. At the same time‚ legal means should not be used to opportunistically pursue allegedly nefarious agendas under the guise of justice and due process‚” the chamber said.

The Black Business Council on Tuesday welcomed Abrahams “confirmation” that there was no political interference in the investigation into Finance Minister Pravin Gordhan.

The BBC CEO Mohale Ralebitso said the council viewed this development in a serious light as the allegations came at a time when the country was facing an economic crisis.

“We trust that the minister will have [a] fair and just hearing, we believe that as a nation we should trust and allow our legal systems to take its due course,” he said.

“The BBC has noted and is concerned by the further deterioration in the currency market against major international currencies, but urge that paralysis not take hold as now more than ever, SA Inc has to become real and that the working streams established by the Presidency and finance ministry continue the joint work with business to avert a downgrade and right the path of the country.”

Business Leadership SA (BLSA) said it was concerned about the timing and the decision to charge Gordhan.

“Our country is experiencing a period of profound upheaval. With another rating agency review ongoing, the medium-term budget policy statement weeks away, serious social protest and violence occurring at our universities, and a number of contentious disputes between state institutions playing out in public, this decision could not have come at a worse time,” it said.

The BLSA said it was important to note   the charges against Gordhan did not suggest  there was improper benefit on the part of the minister.

What was in question was Gordhan’s interpretation of sections of both the Public Service Administration and Public Finance Management  legislations.

However, it was not trying to second-guess Abrahams.

“Nonetheless, the nature of these charges and how they have been pursued creates a strong perception that our prosecutorial institutions are being used for political ends.”

BLSA called on the executive arm of government through the Cabinet to act swiftly and emphatically to affirm their support for the economic strategies and policies set out in Gordhan’s budget speech this year, and in the range of supportive actions spearheaded by him, in the interest of SA, together with business and labour. It also wanted President Jacob Zuma to clearly spell out government’s programme to reassure investors and rating agencies.

'A disaster for the economy'

The fact that Finance Minister Pravin Gordhan will be prosecuted and arraigned on charges of fraud is a disaster for the economy‚ the DA said on Tuesday.

The DA said the announcement by National Director of Public Prosecutions Shaun Abrahams‚ comes two weeks before the tabling of the crucial Medium Term Budget Policy Statement on October 26.

It said this has caused the rand to plummet‚ and will make a sovereign ratings downgrade more likely in South Africa.

DA shadow minister of finance David Maynier said Gordhan maintained that the transaction‚ relating to the early retirement of the former deputy commissioner of the South African Revenue Service‚ Ivan Pillay‚ for which he will be charged‚ was “entirely lawful”.

“We must now trust the courts to determine whether there is any merit to these charges‚” Maynier said.

Fears for governance

The SACP said the charges against Gordhan were a “pretext” to remove him from office and weaken Treasury’s fight against corruption and corporate capture.

The party has likened the charges to the attempts to charge President Jacob Zuma for corruption before he became president.

“The Party has noted the denial of any political involvement in this matter, but also that after assuring Gordhan that he was not a suspect, and then pausing for the local government elections, the matter was suddenly back on the table just after the elections.

“The timing has an eerie similarity with the events that unfolded between 2003 and 2007, when the timing of another prosecution against a senior politician appeared to be coordinated around a political calendar,” said the SACP, referring to then prosecution of President Jacob Zuma on corruption charges.

Constitutional fallout

The Council for the Advancement of the South African Constitution (Casac) said the decision to charge Gordhan would have negative repercussions for the stability of the economy and the country.

It also raised “profound questions” about the integrity of key institutions of democratic governance, the council said.

Casac said no one was above law, and Gordhan, Pillay and Magashule should answer to the charges against them. However, the NPA’s prosecutorial authority had to be exercised without fear, favour or prejudice.

The council said the history of the saga, however, suggested that “extraneous political considerations” had been brought to bear on the decision to proceed with the prosecution.

“The circumstances around the investigation of these matters, the timing of questioning and the leaks to the media, all call into question the good faith and independence of the investigative authority, the Hawks, as well as that of the NPA,” executive secretary Lawson Naidoo said.

This raised serious questions about the legitimate use of the prosecutorial powers by Abrahams.

Earlier on Tuesday, Abrahams denied that there was any political interference.

“The independence of Abrahams remains unproven. This is a major test of both his and the NPA’s impartiality,” Naidoo said.

“The protestation of prosecutorial independence by Abrahams appears hollow when measured against his attitude towards pursuing charges of fraud, corruption and racketeering against President Zuma.”

Casac said it was confident the courts would ensure justice was done in this matter.

The Helen Suzman Foundation cautioned that Gordhan should not be removed from his position as finance minister.

It said Deputy President Cyril Ramaphosa “is reported as having urged that nothing must be done to cause problems or difficulties in state institutions such as the Treasury, or to damage our economic future. We agree with him.”

If the charges against Gordhan were found to have no merit, the NPA would have damaged the economy for no good reason, the foundation said.

The allegations against Gordhan were taking place against the backdrop of a wider crisis of governance in the country, it said.

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