Finance Minister Pravin Gordhan has been summonsed to appear in court on fraud charges relating to the early retirement of former SARS deputy commissioner Ivan Pillay.The rand weakened more than 3 percent against the dollar and the JSE’s banking index dropped by the same amount as National Director of Public Prosecutions Shaun Abrahams began making the announcement yesterday.The Banking Association of SA said it was “fundamentally concerned with the timing” of the decision to charge Gordhan.
The decision comes just 15 days before Gordhan is scheduled to deliver the medium-term budget policy statement and less than two months before SA’s credit ratings are reviewed.
Prosecutor Abrahams said Gordhan, in his previous role as head of the South African Revenue Service (SARS), had cost the tax agency around 1.1 million rand ($79 000) by approving early-retirement for tax agency deputy commissioner Ivan Pillay and re-hiring him as a consultant.
Gordhan is still being investigated for his role in setting up a surveillance unit at the tax department a decade ago which is suspected of spying on politicians including President Jacob Zuma, Abrahams confirmed.
An elite police unit known as the Hawks first questioned Gordhan about that in February in an investigation that some analysts said was the result of political pressure from a faction allied to President Zuma.
The president has denied the claims, and said he was not at war with the finance minister.Abrahams said: “I can assure you there has been no political interference in this matter. There has been no political interference in the decision made.”Gordhan, who is respected by financial markets, has called the allegations about the tax unit “political mischief”. He confirmed that prosecution officials had delivered the summons to appear in court to his house yesterday morning.
“It looks like we are in for a bit of excitement going forward,” he said at a business seminar in Johannesburg. “My lawyers will issue a proper statement in a short while.”Abrahams yesterday lambasted those questioning his decision to prosecute Gordhan on fraud charges.“What if this decision was made by a judge or the Public Protector?” he asked.
“The days of disrespecting the NPA are over. The days of not holding senior government officials accountable are over.”Last week, the Constitutional Court refused to hear the National Prosecuting Authority’s application for leave to appeal against the order to reinstate corruption charges against President Zuma.
In April, the High Court in Pretoria ruled that the 783 fraud, racketeering, and corruption charges against President Zuma should be reinstated.Abrahams said yesterday that he did not find himself in an awkward position over the Gordhan matter, and that he would not resign if the prosecution did not succeed.
He said the purpose of yesterday’s media briefing was to set out the lawfulness of the Sars “rogue unit” and its work, although he said Gordhan was not being charged in relation to the rogue unit.
He was being charged with fraud because of the terms Gordhan and former Sars commissioner Oupa Magashula agreed to for Sars deputy commissioner Pillay’s retirement.Meanwhile, support has poured in from various quarters for Gordhan, on news that he is to be charged with fraud.
While the ANC called on him to co-operate fully with the NPA, Gauteng Premier David Makhura threw his weight behind Gordhan, as did prominent business representatives.
Civil society organisations, meanwhile, raised concern about the fallout for key institutions of governance in SA, and urged that Gordhan should be left in his post as finance minister.
As talk of a possible Cabinet reshuffle intensified following the NPA announcement, the South African Chamber of Commerce and Industry (Sacci) CEO Alan Mukoki said: “A reshuffle is the prerogative of the President but our advice . . . is that in the current climate if you are going to reshuffle you have to be careful . . . and put someone who can rally markets, inspire confidence, send the message that there is no state capture and that fiscal discipline is going to continue.”
The ANC said the probe into Sars and “related, untested and mischievous “conspiracy theories” had had a “detrimental effect” on the South African economy.It expressed the hope that the NPA’s announcement would lead to the truth being uncovered and put the matter to rest.
ANC spokesperson Zizi Kodwa said: “We welcome today’s remarks by the head of the NPA, advocate Shaun Abrahams, rejecting claims of political interference in the prosecutorial process.“The ANC urges all parties, as well as external stakeholders, to allow the law to take its course.
“The ANC further urges Cde Pravin Gordhan and others to fully co-operate with the NPA in order to bring this matter to finality as soon as possible.“The presumption of innocence until proven guilty remains a sacrosanct principle of our law, and the ANC has full confidence in our judiciary to act as final arbiters in these matters.”
The ANC also called on all parties to “desist” from making public comments that would “undermine due process and create further confusion”.But Makhura said at an open tender seminar in Midrand, where Gordhan was speaking when the news of the charges broke: “I would like to take this opportunity to say something to you minister Gordhan, I as the Premier of (the) Gauteng province on behalf of the government that I led without fear of contradiction. We believe in your leadership, we believe in your ethical leadership”
Gordhan received a standing ovation from participants at the seminar after he delivered his speech in which he applauded the Gauteng government for opening up its tender processes.
Makhura told Gordhan not to lose strength as he dealt with the legal matter, and to use his energy to continue to help SA’s economy recover.“We trust as you go through this you will feel our weight as well, you won’t just feel the burden of the responsibilities you were given as the minister of finance.“The truth will come out, the truth is too strong to be kept secret . . . the truth will be transparent and soon thank you very much for blessing us with your presence,” said Makhura.
His statement prompted more applause and cheers from the crowd.Business Unity SA (Busa), one of SA’s biggest business organisations, said that while it respected institutions of law, it was confident in Gordhan.He should be considered innocent until proven guilty, Busa said.
“As Busa we respect the institutions that have been set up by the Constitution and we allow them to do their work without us second-guessing why they have made such decisions but we also know that somebody is innocent until proven guilty. So we will wait to see how the process unfolds,” Busa CEO Khanyisile Kweyama said in an interview yesterday.Busa said it remained confident in the finance minister. — Reuters/News24/BDLive.