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Sanral scandal

26 April 2012, 15:02

Most people were up in arms over Public Protector, Thuli Madonsela’s failure to investigate Richard Mdluli for... well whatever he is accused of having done (frankly I’ve lost count).

Fact is, her mandate as public protector doesn’t extend to criminal investigations, as is actually required in this instance, but is limited to acts or omissions by public servants, with a direct or indirect negative bearing on the public.

What she should be focussing on is the reason the Government Employees Pension Fund (GEPF) invested R 15.7 billion, in one go, into SANRAL bonds.

According to the definition of Insider Trading, which most know to be a criminal offence, this act by the GEPF falls squarely within the parameters of this taboo practice.

“Inside Information”, is defined as:  specific or precise information that has not been made public, and which is obtained or learned as an insider, and, if it were made public would have a material effect on the price or value of any securities or financial instruments. – Insider Trading Act 135 of 1998 (“the Act”).

Rest assured, the investment in SANRAL conforms to all the elements of the above definition, as these bonds are auctioned to bidders, where the price offered is a factor to be considered.

This means the price could be affected by the knowledge Government had in 2011, when the investment was made.

The South African public was only informed of the tariffs and subsequent potential profits for SANRAL, with e-tolling in Gauteng, during the beginning of 2012, giving Government an unfair advantage over normal investors.

Now, firstly, one has to remember that the Government is not bound by any law, unless it binds itself, which in the case of the Insider Trading Act, it didn’t.

However, the trustees of GEPF and Minister of Finance can be held accountable by two other forums, namely, the High Court and...yes, you guessed it, the Public Protector.

But, the rabbit hole goes deeper...

The Minister of Finance bound National Treasury themselves as sureties towards GEPF, in the event that this “investment” left egg on SANRAL’s face, which, incidentally, is becoming more and more possible each day.

Even in the unlikely event that we are being charged from the 30th of April, the success rate in collections will most certainly be even more woeful than Pretoria’s garbage collection services, which could invoke the Government Surety, if the margins fell to unexpectedly low levels.

This will most probably place a direct tax and fuel price levy burden on the consumer, as Government needs to make-up the unexpected loss somewhere, to balance the budget.

By implication then, the consumer across the country, even in Cape Town and Durban, where you don’t have e-tolls, stands as surety for the success of SANRAL’s E-toll project in Gauteng.

Bottom line, it’s a lose-lose situation, for you and me. A victory in court, pre-supposes less tax breaks, higher fuel levies and subsequent higher inflation levels.

In the event that such victory is not attained, the people of Gauteng still pay through their ears.

I suppose one could ask how ethical it was for GEPF to invest on information privileged to Government ears, and then be underwritten by Pravin Gordhan himself, if private companies and individuals could face jail time for doing exactly the same thing!

However, such a question seems so insignificant, in the face of what we actually stand to pay eventually.

If Madonsela were to investigate, and find that Gordhan or the Trustees of the GEPF acted maliciously or with gross negligence, the entire scam would at least be exposed, possibly slamming the final nail in the coffin for this Government.

With the amount of noise COSATU is making around this issue, the worker class of this country wouldn’t accept such a betrayal very lightly.

Come what may, Thuli Madonsela has always acted in accordance with her mandate, even though most people would have preferred her doing more on some issues.

This is a job for her offices, and you can bet that an investigation may start, after finalisation of the urgent application in Pretoria, no matter what the outcome.

Government truly overplayed its hand on this one, and have managed to create a common enemy in themselves by uniting opposition parties and its closest alliance partner in COSATU against it.

The undisputed facts speak for themselves, and now these facts need to be converted into public accountability, through the Courts in a legal fashion, the opposition in a political manner, and the Public Protector in an administrative form.

Be that as it may, one thing is for certain...they’ll have to see me in Court as well, as there’s no way I’m falling in line with e-tolling!

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