Gordhan loses the battle but wins the war

Pravin Gordhan. Picture: Lucky Morajane
Pravin Gordhan. Picture: Lucky Morajane

The North Gauteng High Court dismissed former Finance Minster Pravin Gordhan’s application for it to grant a declaratory order that he, as minister of finance, cannot in any way interfere in the relationship between a bank and its clients.

But not before it made it clear that no member of the national executive can intervene in a private bank-client dispute.

In October last year Gordhan asked the court to confirm that as finance minister he cannot intervene in a dispute between Oakbay Investments and four other banks.

This came after the banks closed the Gupta-owned Oakbay accounts.

Gordhan’s application was in response to the supposedly persistent lobbying he was subjected to by the Gupta family’s businesses.

Today’s judgment said that the court viewed the application by the minister as “unnecessary”.

“We hold the strong view that this application was clearly unnecessary in the circumstances of this case.

"Such circumstances do not warrant that the court exercises its discretion to grant the declaratory relief by pronouncing itself on an undisputed legal question, which has previously been confirmed in judgments,” said Judge Aubrey Ledwaba as he read out the judgment on Friday morning.

It clarified that “there is no statute that empowers a member of the national executive such as the minister, to intervene in a private bank-client dispute. Neither does the Constitution confer such powers.”

This effectively gave Gordhan the clarification that he wanted but the judge would not grant the declaratory order because “to grant the minister the declaratory relief would allow the judiciary to stray into the exercise of executive functions where the circumstances do not warrant this involvement.”

READ: Gordhan vs Guptas: Both sides have ‘irrelevant’ smears struck from affidavits

The court also addressed the issue of an alleged inter-ministerial committee that was headed by Mineral Resources Minister Mosebenzi Zwane, calling it unlawful.

“Perhaps the only issue that could have been of concern to the minister and to the banks, regarding possible uncertainty on the legal question the minister sought answered in the application, relates to the alleged establishment of the inter-ministerial committee comprising the minister of labour [Mildred Oliphant] and the minister of mineral resources [Zwane] and its attempts to, contrary to the law, interfere in the dispute between the banks and the Oakbay Group,” the judgment said.

According to Zwane, the inter-ministerial committee – consisting of himself, Gordhan and Oliphant – was established at a Cabinet meeting on April 13.

Gordhan refused to be part of the committee and never attended its meetings with banks or other financial service providers.

However, Cabinet distanced itself from Zwane’s statements, saying that the committee did not actually exist.

READ: How Guptas called in the cavalry

Response

Current Minster of Finance Malusi Gigaba said, in a two-line statement, that National Treasury would not appeal the judgment.

“The minister of finance accepts and respects today’s high court judgment on Oakbay and will not appeal it. The minister will abide by the court judgment,” the statement said.

The Banking Association of South Africa said that the ruling clarified the “nature of private bank-client relationships”.

Cas Coovadia, managing director of the association, said that even though the sanctity of client-bank relationships was confirmed he was particularly concerned with the motives of Zwane and Oliphant in establishing the inter-ministerial committee.

Coovadia said “both ministers should be held to account in providing reasonable explanations of their apparent actions.” – Additional reporting Fin24

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