Timing of Gordhan summons questioned by political experts

Questions have been raised about the timing of the National Prosecuting Authority’s (NPA’s) decision to charge Finance Minister Pravin Gordhan.

Gordhan himself asked shortly after hearing that a summons for him to appear in court had been issued: “South Africans need to ask whose interest these people in the Hawks, the NPA and the NDPP are advancing?

“Where do they get their political instruction from and for what purpose?”

NPA head Shaun Abrahams announced yesterday that Gordhan would be prosecuted for alleged misconduct over a retirement package paid to a colleague in 2010.

He said Gordhan and two others – Ivan Pillay and Oupa Magashula – “must be prosecuted and arraigned” for fraud amounting to more than R1.1-million relating to Pillay’s early retirement.

The news sent the rand and share prices reeling.

The rand plunged as much as 4.6% against the dollar last night amid fears Gordhan’s legal troubles could damage investor confidence in South Africa, where he has stood out as a reliable figure for financial markets against a backdrop of corruption.

The banking index fell as much as 5.12%, wiping R46.3-billion off the market capitalisation of South Africa’s six biggest banks.

Abrahams said Gordhan would face two counts – one of fraud and one involving the extension of Pillay’s contract.

Insisting that there was no political interference, he admitted those prosecuting the case were in a tricky situation.

The charges came a day after Zuma indicated he was not prepared to answer public protector Thuli Madonsela’s questions relating to her investigation into state capture until he had been allowed to interrogate key witnesses.

Experts now believe the charges against Gordhan could be a strategic move as the Presidency may have found out that the Treasury had been providing implicating and damaging evidence to the probe that Zuma was not happy with.

“They have been threatening to charge him for quite some time and the idea is to drive him out,” political analyst Mcebisi Ndletyana said.

He said charging Gordhan when the NPA was yet to reinstate corruption charges against Zuma in relation to the spy-tapes saga raised suspicion as “the Treasury has been responsive to the public protector’s request for information on the investigation into state capture”.

Another analyst, Andre Duvenhage, said it was known that the president was unsettled by Madonsela’s investigation.

But, last night, Zuma came out in support of the finance minister.

In a statement issued by the Presidency, Zuma called for the matter to be dealt “with the necessary dignity and respect”.

He reaffirmed his support for Gordhan, saying the decision came at a sensitive time, when Gordhan was successfully leading initiatives towards the country’s economic revival.

“Our society is anchored on the rule of law as well as fair and just judicial processes ... Gordhan is innocent until and unless proven otherwise by a court of law,” Zuma said.

Gordhan said last night he was seeking legal advice to bring the matter to a swift end.

The Treasury said: “It is most unfortunate that the Hawks have, once again, chosen to initiate legal proceedings at a moment that appears calculated to maximise the damage inflicted in the economic well-being of South Africans and essential processes of government.

“The charges are patently without merits. It is quite clear that the legal processes are contaminated by abuse for political ends.”

Gordhan is expected to deliver his mid-term budget on October 26, appear in court on November 2, while the Standard and Poor’s rating decision is expected on December 2.

Law expert Lewellyn Curlewis said it would be difficult to prove the charges, that Gordhan acted intentionally and unlawfully in authorising Pillay’s early retirement.

He said the Public Finance Management Act (PFMA), under which Gordhan was being charged, was not applicable to SARS.

Gordhan’s legal advisers agreed, saying: “The PFMA applies to national and provincial departments of state, the public entities listed in schedule 2 and 3 and constitutional institutions.

“SARS is not a department of state. It is a public entity listed in schedule 3A.”

University of Cape Town professor of public law Pierre de Vos said the prosecutor would struggle to prove that Gordhan intended to defraud the state.

“It’s going to be difficult when the legislation itself says that the minister can approve an early retirement with the full retirement benefits,” he said.

“The regulations allow a person who has taken retirement to be appointed for up to three years – and that is exactly what happened.”