Atlanta | Tuesday
THE inquiry into the weakening rand should have included an investigation on the government’s inaction, Tradek economist Mike Shussler said on Tuesday.
He was reacting to the terms of reference for the probe, announced by the Presidency on Tuesday afternoon.
Shussler also expressed concern about the time period which the commission of inquiry, led by senior advocate John Myburgh, would investigate.
The commission must inquire into and report on whether between January 1 and December 31 last year, any person or juristic entity, directly or indirectly, entered into, concluded or caused any transactions which contributed or gave rise to the rand’s rapid depreciation relative to other currencies.
”I find it a bit funny … it’s a very long time period. They’re really going to struggle through those transactions. It’s a very big thing to investigate for a long time period,” Schussler said.
He said up to $10-billion was traded on an average day on the exchange market.
Schussler said he was surprised to see that the terms of reference excluded an investigation into the government’s conduct on the depreciating rand.
”It took the government a long time to do anything … they did not make any statement to talk up the market. There was a deadly silence from government at the end of the day.”
The terms of reference also states that the investigation should determine whether the transactions were illegal, or unethical, albeit legal.
”The problem with unethical is — what the heck is unethical? It is a very broad thing — what’s unethical for me might not be unethical for the commission,” Schussler.
The commission would also investigate whether any of the transactions in question were ”involved in any collusion on the part of any person or juristic entity”.
Schussler said he agreed with that, but that was very hard to prove.
”The problem is again insider trading in the foreign currency market is not illegal — but that has to be stamped out though.”
Schussler also expressed concern that the inquiry might result in a witch-hunt.
”Businessmen who do well are going to feel there is a witch-hunt,” he said. – Sapa