President flies out for two weeks as Gordhan standoff goes on
President Jacob Zuma flew to Kenya yesterday and will be away for a fortnight as Finance Minister Pravin Gordhan slugs it out with the Hawks.
Gordhan said yesterday he would not comply with the summons by Hawks’ head, General Berning Ntlemeza, to present himself at the unit’s offices today.
The Hawks said Gordhan was to be questioned about allegations related to his role in the formation and activities of the so-called “rogue unit” set up when he was head of the SA Revenue Service.
“I have a job to do in a difficult economic environment and have to serve South Africa as best I can. Let me do my job,” he said yesterday.
Gordhan’s legal team, which includes prominent advocate Wim Trengove, will represent him at the meeting with the Hawks.
Former finance minister Trevor Manuel has defended Gordhan‚ saying it is ridiculous that an “acting” head of the Hawks is persecuting him on baseless charges. On eNCA‚ Manuel warned that if Gordhan were arrested, the consequences would be catastrophic – far worse than the damage done by the firing of Finance Minister Nhlanhla Nene, Gordhan’s predecessor, in December.
“To go back to that is really to scream ‘fire’ in a crowded theatre. Such action will destroy this economy,” Manuel said.
“The next move is up to the head of state to say, ‘If you have any evidence‚ let’s handle this in a responsible way’.” Zuma will today travel to Nairobi, Kenya, for the sixth summit of the Tokyo International Conference on African Development.
From there, he is expected to travel to a meeting of the Southern African Development Community in Swaziland before going to China.
Insiders said the Hawks would have told Zuma that Gordhan had been ordered to report. Other government officials said Gordhan would be in Cape Town and his lawyers would handle the fight with the Hawks for now.
In a letter sent to Gordhan, Hawks investigator Major-General MS Ledwaba wrote that the investigation “is complete” and asked Gordhan to “give his version on the allegations” against him.
The letter shows that the Hawks are investigating charges of contraventions of the Public Finance Management Act, the Prevention of Corrupt Activities Act and the National Strategic Intelligence Act. Ledwaba said Gordhan had approved the early retirement of deputy SARS commissioner Ivan Pillay, resulting in Pillay being paid an early retirement penalty of R1.2-million.
Ledwaba said Gordhan then approved rehiring Pillay on contract. The Hawks said the “rogue” investigative unit was created in contravention of the National Strategic Intelligence Act.
In a statement on the Treasury website, Gordhan says he believes the investigative unit was lawfully established.
As the pressure on Gordhan mounted yesterday, the rand weakened by more than 50c against the dollar from late on Tuesday. Currency dealer Andre Botha.
“The shaky political sphere we have negotiated in the past six months is in danger of collapsing‚ and a lot of good sentiment has been washed away.”
Stats SA data has shown inflation slowing from 6.3% in June to 6% in July, but the fear is that a weaker rand would undo this.
Economist Azar Jammine said Gordhan now saw himself as a crusader for the country. If he were fired, Jammine said, it would be devastating for the economy.
He said top Treasury staff would probably quit and the new team was likely to be far less fiscally austere.
“They would be spending like crazy and the consequences would be money flowing out of the country and interest rates increasing.” – Additional reporting by Shenaaz Jamal, BDlive