Cape Town – The recommendation to President Jacob Zuma to set up a judicial inquiry into the banks’ conduct over the blacklisting of Gupta-owned businesses will force rating agencies to downgrade SA to junk status, said Democratic Alliance finance spokesperson David Maynier on Friday.
He said it amounts to a “political hit”, not just on the banking sector, but also on National Treasury and the South African Reserve Bank.
As such, Maynier said the DA would petition Zuma not to establish the judicial commission of inquiry.
The rand was level at R14.66 to the greenback on Friday at 10:30.
The inter-ministerial committee headed by Mineral Resources Minister Mosebenzi Zwane recommended that the inquiry should look into the current mandates of the Banking Tribunal and the Banking Ombudsman.
Oakbay on Friday said it pays about R1m a month in financial fees to utilise non-South African banks to pay their staff, after all South Africa's banks blacklisted the firm without giving reasons. Allegations of state capture and corruption against the Guptas are seen as the main reason for the blacklisting.
The announcement by the minister is likely to cause further market turmoil, currency weakness and make a sovereign ratings downgrade more likely in South Africa, said Maynier.
“The fact that the Minister of Finance, Pravin Gordhan, was a member of the committee, but boycotted its meetings, shatters the credibility of the committee and its recommendations, and suggests Cabinet are divided on how to deal with the Guptas.”
Zwane said evidence presented to the inter-ministerial committee “indicated that all of the actions taken by the banks and financial institutions were as a result of innuendo and potentially reckless media statements, and as a South African company, Oakbay had very little recourse to the law”.
“Evidence presented to the IMC (inter-ministerial committee) suggested that all of South Africa’s economic power vests in the hands of very specific institutions, institutions who have shown that their ability to act unilaterally is within their mandate and is protected,” Zwane said in a statement released late on Thursday night.
“These institutions are owned by private shareholders and report to National Treasury who in turn do not need to act on information provided to it.”
What the banks said
Nedbank spokesperson Esme Arendse told Fin24 on Friday that “should any official investigation be set up, Nedbank would participate in a constructive and transparent manner”.
An Absa spokesperson told Fin24 that the bank “cannot comment as the said judicial inquiry has neither been set up nor its terms of reference announced”.
Standard Bank spokesperson Ross Linstrom told Fin24 on Friday: “We have no comment.”
Cas Coovadia, managing director of the Banking Association South Africa, told Fin24 on Friday that they "will await a response from the president to the recommendations before considering this release".
Zuma’s spokesperson Bongani Ngqulunga, phoning from China, told Fin24 on Friday that he would get comment from the president ahead of the G20 Summit.
FNB, Treasury and the SA Reserve Bank have yet to respond to media enquiries.
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