Public Protector denies BLF involvement in Absa investigation

2017-09-24 06:05
Public Protector Busisiwe Mkhwebane. (Pic: Netwerk24)

Public Protector Busisiwe Mkhwebane. (Pic: Netwerk24)

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Public Protector Busisiwe Mkhwebane allegedly went out of her way to conceal the involvement of several key players – including Black First Land First (BLF) and South Africa’s spy agency – in her investigation into the Absa-Bankorp bailout.

To this end, she allegedly withheld crucial documents and even denied in sworn legal papers that the BLF had submitted a complaint to her office, despite there being a record of this.

This is contained in documentation accompanying a supplementary affidavit filed by Barclays Africa chief executive Maria Ramos in the Pretoria High Court.

The bank wants the court to set aside the Public Protector’s report, which found the bank had to repay R3.2bn in relation to the R1.25bn apartheid-era bailout of Bankorp by the SA Reserve Bank. Absa bought Bankorp in 1992.

According to court papers filed last week, Mkhwebane said there were no submissions and no minutes from any meetings held between her and the organisation. But documents before court show the BLF made an official submission to the Public Protector in February, through its leader Andile Mngxitama.

In the submission emailed directly to Mkhwebane and two of her staff members, the BLF recommends that “R3.2bn plus the loss in tax revenue, together with the interest that has been accumulated”, be recovered from Absa. Those implicated should be criminally charged, it adds.

The BLF says the money should be split equally between providing “free quality decolonised education and benefiting unemployed black youth “trapped in poverty in the townships”.

The BLF’s submission in February followed an agreement reached at a meeting between the office of the Public Protector and the organisation, held on January 12.

But what will most likely be more devastating to Mkhwebane’s attempts to distance herself from the BLF is correspondence between the protest movement, her office and the SA Revenue Service (Sars).

"Deeply disturbed"

An email trail shows that, on the same day that Mkhwebane received the BLF’s “submission of evidence”, she forwarded it from her iPhone to two senior staffers in her office, Tebogo Kekana and Neels van der Merwe.

She included the instruction: “Neels, please get us some information on the tax implications of the gift to Bankorp.”

On March 6, Mkhwebane acted on the BLF submission, writing to Sars commissioner Tom Moyane to enquire about the “tax implication of the [R1.25bn] donation that was received by Bankorp/Absa”.

In a detailed reply two weeks later, Moyane gave Mkhwebane an elementary lesson on the Tax Administration Act’s secrecy provisions and case law about the subject before stating: “It is our opinion that Sars is legally prohibited from providing the information requested...”

In court papers, Absa lawyers Webber Wentzel accuse Mkhwebane of withholding submissions from the State Security Agency (SSA) and economist Chris Malikane in court papers.

These submissions are believed to have influenced the Public Protector’s remedial action that Absa should repay the money and that the constitutional mandate of the SA Reserve Bank be changed.

In correspondence to Mkhwebane’s lawyers, Sefanyetso Attorneys, Webber Wentzel charges that, “despite being in possession of both the Malikane submission and the SSA submission ... your client neglected to include these documents” in court papers and in the bundle exchanged between the firms.

In her supplementary affidavit, Ramos says that “it is wholly unclear” why the SSA and the unidentified economist (believed to be Malikane) were discussing remedial action against Absa two weeks before the release of her final report.

“I am in particular deeply disturbed about why the State Security Agency should have any views at all on the remedial action being considered by the Public Protector against Absa,” Ramos says.

In addition to these documents, Absa is seeking a trove of other records that the bank says are material to the investigation and the Public Protector’s findings.

These records include interviews with prominent people who were involved in the original deal, the fallout that resulted from it, and who had a role in the original investigation into the loan by UK-based company Ciex and its founder Michael Oatley. However, many of these records simply could not be found, according to the Public Protector’s responses.

Finding against Absa and imposing remedial action while failing or refusing to provide the bank with material records amounts to a violation of “procedural fairness”, Ramos argues.

“The record confirms and strengthens both these submissions for the reasons set out below and gives rise to a further basis of review. There were five categories of documents that the Public Protector had failed to give to Absa timeously or at all in the course of this matter,” the affidavit reads.

Mkhwebane’s spokesperson Cleopatra Mosana said: “The Public Protector does not intend to litigate through the media and will address all issues in her answering affidavit in court.”

Read more on:    public protector  |  absa  |  busisiwe mkhwebane

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