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NPA head denies political meddling after Gordhan summons

Shaun Abrahams says there’s no political interference in his decision to issue Gordhan with a summons.

Advocate Shaun Abrahams. Picture: Reinart Toerien/EWN

JOHANNESBURG - National Prosecuting Authority (NPA) head Shaun Abrahams insists there's been no political interference in his decision to issue Finance Minister Pravin Gordhan with summons to appear in court.

Also charged is former South African Revenue Service (Sars) commissioner Oupa Magashula and his ex-deputy Ivan Pillay.

The charge relates to a payout made by Sars to Pillay when he took early retirement.

Abrahams says the finance minister and the two former Sars officials will be prosecuted on several charges including fraud.

The three have maintained their innocence, with suggestions that the investigation is politically motivated.

Abrahams says the head of the Priority Crimes Litigation Unit and the North Gauteng director of public prosecutions made the decision to prosecute after considering all available evidence.

"Mr Pillay, Mr Magashula and Mr Gordhan must be prosecuted and arraigned on, inter alia, the following crimes: Fraud in respect of the R1,141,178.11, whereby the aforementioned persons had misrepresented to the Government Employment Pensions Fund and Sars that Mr Pillay was entitled to full pension benefits, in terms of the employee severance package which was implemented for transformation initiatives. Whereas, in fact, the aforementioned persons knew well the employee package was not applicable to Mr Pillay."

He adds the three were informed of the decision.

"They have been served their summons which list the charges in terms of which they are required to appear in the Pretoria Regional Court on 2 November 2016. As I sit before you today, I assure you of my commitment to my oath of office to uphold, protect and defend the Constitution."

Abrahams says the formation of the unit was simply against the South African Constitution.

"No other conclusion can be deduced other than the creation of the Sars high-risk investigation unit was built in conflict with and violation of the legal mandate of Sars in terms of the Sars Act, the National Strategic Intelligence Act and Chapter 11 of our Constitution."

He has also quoted a part of the Constitution, regarding the president being the only person who can form an intelligence service.

"Section 209 of the Constitution enjoins, and I wish to emphasise this, the president of the republic as head of the national executive as the only one who may establish an intelligence service, other than any intelligence division by the SA Defence Force of police service. The president may, however, only exercise such power in terms of national legislation."

Reuters is reporting that the finance minister said the summons was hand delivered to his house by a brigadier, but that he was not home at the time.

Gordhan said he will appear in court on 2 November, adding his lawyers will issue a statement.

Meanwhile, Gordhan has questioned the timing of the move, which comes just two weeks before he's due to deliver his medium term budget.

The finance minister was speaking at a seminar on open tenders in Midrand today where Gauteng Premier David Makhura also said that he still believes in Gordhan's leadership, despite today's developments.

The Gauteng government says it knows that Gordhan is an ethical leader.

CONCERNS

The rand has taken a knock on the news that Gordhan is being charged, falling by around 3%.

Emerging markets analyst Peter Attard Montalto says the markets have been taken by surprise and may have underestimated the political risk in South Africa.

"After the recent polls that we had and the war within factions of the ANC, these events have woken people up to the fact that it's been ongoing beneath the surface and it's moving forward. People assumed too much damage would be done by these sorts of steps, so it seems after the NPA's move that there is indeed pressure that's going to move things forward."

Nedbank economist Isaac Matshego says the latest development is very concerning.

"There are questions on whether he (Pravin Gordhan) is going to be the person to present the statement and next year's budget. The main issue, if not him, is whether we will continue on this path of fiscal consolidation and strengthening government finances as we need to."

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