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Moody's to arrive in SA with Hawks hovering over Gordhan
The Moody’s ratings agency team will arrive today to investigate whether to downgrade SA's credit rating.
JOHANNESBURG – Just hours before the Moody’s ratings agency's assessment team arrives in South Africa, Finance Minister Pravin Gordhan has said the promise by the Hawks to use their constitutional powers against him is a threatening statement. MOODY’S
He says he's told his lawyers to prepare an adequate response after the Hawks yesterday said he had missed a deadline to respond to questions about a South African Revenue Service (Sars) unit, and it was preparing to exercise its constitutional powers.
Gordhan has previously said he won't respond to the Hawks’ questions because he wants clarity about what they actually want, and he needs to know if they're investigating a particular offence.
He says the Hawks are simply wrong to claim he has not responded to any of their letters and that those who leaked a letter addressed to him did so to mislead and malign him.
Meanwhile, officials from the Moody's ratings agency are due to land in the country today, to investigate whether to downgrade South Africa’s credit rating.
Econometrix economist Azar Jammine says that if the Hawks take strong action against the finance minister it would create a huge reaction.
“That in itself would precipitate a mass of changes in the political and social framework of the country.”
The Hawks have said their investigations will not be stopped by an individual who refuses to comply with authorities and demands preferential treatment.
Moody’s officials are seeing headlines and statements about the Hawks preparing to use their constitutional powers against the person they see as pivotal to the economy.
Jammine says if the Hawks’ action against the finance minister were to result in him being arrested, there would be a huge reaction.
Moody’s officials are expected to meet top officials at National Treasury and in other financial institutions during their trip.
The markets don't seem to like this little debacle one bit.
The rand slumped yesterday, dropping below to the 16 to the dollar level after the Hawks issued that statement.
It's pulled back a bit to around R15.95, but it's still significantly weaker than it was before these developments.