‘Public Protector’s Absa report undermines Parliament’

Parliament has joined Absa and the South African Reserve Bank (Sarb) in their legal action against the Public Protector.

FILE: The National Assembly in session. Picture: GCIS

CAPE TOWN - Parliament has joined Absa and the South African Reserve Bank (Sarb) in their legal action against the Public Protector.

The national legislature is to launch a court application to have Busisiwe Mkwhebane’s remedial action relating to her call for the constitutional mandate of the central bank to be amended set aside on the basis of its unconstitutionality.

She wants members of Parliament to change a section of the Constitution that speaks to Sarb’s protection of the value of the currency. It's a call which has been met with fierce criticism.

Parliament's spokesperson Moloto Mothapo says: “For the Public Protector to direct a committee and even direct how it should conduct its work, as well as the wording of that particular amendment, undermines the National Assembly as provided for in the Constitution. Therefore, we decided it warrants a judicial review.”

In her report released earlier this week, the Public Protector found the Reserve Bank failed to protect the public interest by bailing out Bankorp during the apartheid era and then did not recover the funds after Absa took over.

Mkhwebane went as far as spelling out the changes that should be made to the Constitution.

But, Section 57 of the Constitution empowers the National Assembly to control its own arrangements, proceedings and procedures.

Parliament says although the Public Protector's remedial action is binding, Mkhwebane's report effectively usurps the powers of the institution.

IMPLICATIONS

Judge Dennis Davis, who chaired the Davis Committee of Experts that investigated the Bankorp bailout in 2000, says Mkwhebane's Absa report could have huge implications as it says that all monies misspent by government must be recovered.

Judge Davis says Mkhwebane points to an international treaty signed by South Africa that says that government has an obligation to recoup money that has been shown to be wasteful expenditure.

“If that is the argument the Public Protector is presenting in the report, I suspect it is going to be a very interesting argument that will come before court on a broader argument on government expenditure.”

Davis also says that while he has examined her report very closely, he does not find any fact or reasoning to change his finding that Absa should not pay any money to government

On Monday, Mkhwebane ordered the Special Investigating Unit (SIU) to recover the money from Absa.

The Public Protector said the government failed to act on the CIEX report.

“Dealing with alleged stolen state funds after commissioning and paying the same, whether the South African government failed to improperly implement the report is substantiated.”

She referred the matter to the SIU to recover an amount of R1.1 billion.

“The South Africa Reserve Bank must cooperate fully with the SIU and also assist the SIU in the recovery of the misappropriated public funds.”

Mkhwebane found that the government’s failure to recover the funds has prejudiced the public.

LISTEN: Absa explains legal action over Public Protector report

Additional reporting by Rahima Essop & Stephen Grootes.

(Edited by Shimoney Regter)