SA’s economic credibility hinges on Gordhan’s job call

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28 Mar 2017

Quick take on the day’s events from political analyst Daniel Silke:

South Africa sits at the edge of yet another politically-induced crisis relating to the position of her Finance Minister and prudent economic management of the economy. Pravin Gordhan is clearly under extreme pressure. Should he survive,he will have to elicit the support of key members of the NEC's top 6 and perhaps, Deputy President Cyril Ramaphosa.

If this group is not prepared to draw a line in the political sand, his position may be untenable.

What is at stake is the economic credibility of the country precisely at a time when growth looked set to show some green shoots, the currency had strengthened and there was a moderate uptick in business confidence. The country can barely afford another round of politically induced risk to influence her core economic indicators.

Whatever the eventual outcome of this unedifying set of events which once again pit the interests of the country against the vested interests supporting factions within the ANC, South Africa will be under pressure to regain the momentum she was just beginning to secure.

28 Mar 2017

Zuma's threat to Gordhan can't be shrugged off

Investors have been roiled by President Jacob Zuma's threat to fire Finance Minister Pravin Gordhan.

The rand sank by almost 3% and yields on the country's benchmark 10-year bond jumped by as much as 30 basis points on Tuesday after Bloomberg News reported that Zuma had told allies he planned to fire Gordhan. But, within the course of the morning, investors were starting to pare those losses.

By recalling Gordhan in the midst of a high profile international roadshow with investors, Zuma has sent an unmistakable and profoundly negative signal about South Africa's attractiveness as a place to invest.

Read the full column by Marcus Ashworth

28 Mar 2017

In other news related to the country’s finance institutions, SARS boss Tom Moyane charged that Judge Dennis Davis who heads up the Davis Tax Committee has attacked and affronted the Revenue Service and therefore there has been a breakdown in trust.

SARS briefed the standing committee on finance in Parliament on the organisation’s quarterly report ended 31 December, while Moyane responded to a number of burning questions from members of Parliament. 

David Maynier, Democratic Alliance shadow minister of finance, asked Moyane to respond to a number of issues, such as his earlier statement that Davis was no longer fit to serve on the specialist tax committee. 

Maynier put it to Moyane that the “breakdown of trust” between SARS and Davis was due to the Revenue Service resisting an investigation by the committee into SARS’ systems and operations. 

“You’re resisting the Committee’s investigation into tax administration. For a period of several months they’ve (the committee) tried to make contact with you so that the investigation can proceed.” 

Moyane categorically denied this, saying any allegations that it has hindered or resisted an investigation are simply untrue.  – Liesl Peyper

READ: SARS boss Moyane: Judge Davis attacked, affronted us:

28 Mar 2017

Cape Town - Finance Minister Pravin Gordhan arrived at the North Gauteng High Court in Pretoria with an entourage from Treasury.

This is seen as a strong show of support for Gordhan, whose legal team is facing off with 14 Gupta-owned companies over the blacklisting of their bank accounts by South Africa’s top four banks.

Gordhan is seeking a declaratory order to protect the Treasury’s executive from having to intervene in the closure of the Guptas’ bank account by the country’s top four banks.  

READ: Treasury entourage shows courtroom support for Gordhan

28 Mar 2017

In other Gordhan-related news SARS boss Tom Moyane has lashed out at critics of the Revenue Service, telling Parliament on Tuesday that the unwarranted attacks on the organisation are having a negative impact on the confidence of taxpayers.

“We’ve seen a disturbing trend – tax compliance levels are beginning to deteriorate and we’re already in a dire economic situation that negatively impacts on our collection ability.”

Briefing Parliament’s standing committee on finance on its quarterly performance at the end of December 2016, Moyane came out guns blazing against those who criticise SARS, implying that the revenue collector is unable to fulfil its functions.

“So much has been said about SARS,” Moyane said, “and it’s extremely damaging to us as a leading government agency.”

READ: Moyane lashes out at SARS critics

28 Mar 2017

Markets seem optimistic: Rand now trading at R12.87/$, still 1.04% weaker than its overnight close in New York, but very much firmer than its intraday low of R13.11.

28 Mar 2017

Court has adjourned for the day, but stay with us for more comment, video interviews and a recap of the day's proceedings.

28 Mar 2017

Maleka speaks about the role of the president in the matter.

The relief Standard Bank seeks logically extends from the relief the minister seeks.

28 Mar 2017

Back in court, Standard Bank arguing their case.

Adv Maleka for Standard Bank: Courts are the only institution that can resolve this application.

28 Mar 2017

Gauntlett: Given the context - no one in this country must push a minister or force a minister to do what they are not bound to do.

28 Mar 2017

Mlambo: It is accepted by everyone that he cannot intervene. What do you seek from us to give a final nod?

28 Mar 2017

Gauntlett: The allegation that the minister has ulterior motives is serious.

28 Mar 2017

Gordhan back in court.

28 Mar 2017

Gauntlett lays out that two points- separation of power and the political conspiracy have been struck out

28 Mar 2017

Judge complains about the disturbance as about 5 journalists left the courtroom with Gordhan, Jonas and other members of Treasury (who had just arrived).

28 Mar 2017

Gauntlett: for a declaratory order - in modern law there need not be dispute. In this case there was considerable disput

Secondly, there need not be an opponent.

Third, there need to be interested parties, who will be bound by the matter.

Finally the issue must not be abstract.

Gauntlett says these requirements have been met.

28 Mar 2017

Political risks once again plays into value of the rand going forward, economic analyst Daniel Silke told Fin24.  

Anything that looks like a disrupting status quo of fiscal stability in South Africa, or political interference in the Treasury will have a negative effect on the rand.

While the rand has declined [by 3% overnight, and more on Tuesday to trade at R12.95/$ currently], it is still a currency that remains more buoyant than it was a year ago.

28 Mar 2017

Gauntlett: Finally the issue must not be abstract.

28 Mar 2017

Gauntlett: The minister has statutory powers, restricted by important considerations.

28 Mar 2017

Gauntlett: He is not dis-entitled from another remedy which the law affords.

28 Mar 2017

Deputy Judge President Aubrey Ledwaba: Why didn't minister just get an interdict?

28 Mar 2017

What Gordhan's team is arguing is that "nothing in the Constitution, the Public Finance Management Act, the Banks Act or any other legislation, regulation or common law authority authorises ministerial intervention.

The Reserve Bank itself confirms that the same applies to it: there is no legal provision which entitles the Reserve Bank to interfere in the relationship between banks and their clients.

The Registrar of Banks similarly confirms the same in respect of himself.

A fortiori, then, the same should apply to the Minister of Finance, because if the primary regulator has no power of intervention then the political head overseeing the entire financial sector will have even less legal authority to do so.

It wants the court to agree on this. However, while the Guptas agree with this, they want Gordhan to pay costs and/or drop the case, because they believe it is a moot point.

28 Mar 2017

Gordhan lawyers say NO DEAL

Jeremy Gauntlett: I regret that the position remains as far as we have it. There is not a party that considers that the framing of the minister’s power and motion of law. There are consequential issues of cost.  

Oakbay and Gordhan lawyers met for an hour from 2pm to determine whether they could settle, but this failed.

28 Mar 2017

Watch the interview

28 Mar 2017

Oakbay and Gupta lawyer, Gert van der Merwe, tells Fin24's Matthew le Cordeur Finance Minister Pravin Gordhan should drop the case.

"Gordhan should not proceed with the application," he says.

"The minister knew very well that the relief is not necessary since everybody agreed on it. We opposed because of the frivolous allegations made in the paper." 

28 Mar 2017

Oakbay and Gupta lawyer, Gert van der Merwe, speaks to Fin24's Matthew le Cordeur:  "We are very relieved by the outcome. We completely agree with the rulings of the judges. I think it takes out a huge political sting," he says.  

"In particular, the judges determined that the reference to the FIC certificate is now struck from the papers. And similarly, any reference to the Jonas, or the alleged Jonas meeting is struck from the papers so we are very relieved with that."

28 Mar 2017

Pretoria – It’s not too late for Finance Minister Pravin Gordhan and Oakbay to settle, the North Gauteng High Court heard on Tuesday.

Judge President Dunstan Mlambo will meet the legal counsel of the different respondents which includes 14 companies owned by the Guptas, National Treasury, the Reserve Bank governor, the FIC director, the registrar of Banks, Standard Bank, Nedbank, Absa and FNB.

Mlambo made a ruling on the strike out applications by Oakbay, Gordhan and Sahara computers before adjourning court proceedings into the case where Gordhan is seeking protection from intervening in the banks' decision to close the bank accounts of Oakbay. - Lameez Omarjee and Matthew le Cordeur


28 Mar 2017

Court will resume shortly.

28 Mar 2017

Johannesburg - Finance Minister Pravin Gordhan said foreign investors showed great faith in the economy while he was in London, adding that there are many people in government who also want to make sure the economy is on track.

President Jacob Zuma ordered Gordhan to cancel meetings with investors in the UK and the US and return home on Monday, a day after he flew to London to begin the week-long roadshow.

Zuma told senior leaders of the South African Communist Party that he plans to fire Gordhan, according to three people with knowledge of the matter. The rand plummeted.

Asked about reports that he may be fired after he landed, Gordhan said: “I’ve just landed so let’s wait and see.” - Bloomberg

READ: Gordhan: Investors showed great faith in SA economy
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