SA Reserve Bank wins court bid against Public Protector

The South African Reserve Bank (SARB) has won its application to have the Public Protector’s remedial action to change its constitutional mandate set aside.

The judgment on Tuesday was delivered in the North Gauteng High Court by Justice Cynthia Pretorius following the SARB’s application on August 1.

The judgment, read on behalf of Judge John Murphy, comes a few days before August 18, the deadline that the SARB and Parliament were given to respond to Public Protector Busisiwe Mkhwebane with an action plan on her remedial action.

The judge said the obligation placed on the chairperson of the portfolio committee on justice and correctional services and the SARB to submit an action plan is also set aside.

Mkhwebane must pay costs for the application, up to and including the filing of her answering affidavit, the judge said.

During the hearing on August 1, the SARB opposed Mkhwebane’s order, which was part of a report released in June based on an investigation into the Bankorp bailout during the apartheid era.

Mkhwebane ordered the bank’s mandate to be changed to ensure the socio-economic well-being of citizens and to achieve socio-economic transformation.

However, the bank contested this on several grounds, among these that it falls outside the Public Protector’s powers and that the remedial action breached the separation of powers because it encroached on Parliament’s exclusive domain. It was also not related to the subject of the Public Protector’s investigation.

The SARB pointed out that the remedial action was irrational and the process was unfair, as it was not given an opportunity to comment on the constitutional amendment.

Reserve Bank governor Lesetja Kganyago previously said that the bank’s primary objective is to protect the value of the currency, in the interest of balanced and sustainable growth.

“I know of no central bank that does not have this mandate. These institutions are best equipped to carry out this function, and stripping them of this mandate would raise the question as to where the responsibility for price stability should lie,” he said at the bank’s annual general meeting on July 28.

During the hearing, David Unterhalter SC, who represented the SARB, explained that relief was being sought from the courts as the Constitutional Court has previously ruled that the remedial powers of the Public Protector are binding. The Reserve Bank will have to obey the remedial action unless the court rules that it is unlawful.

Unterhalter further argued that the Public Protector misunderstood the role of the Reserve Bank. “The Public Protector has simply failed to appreciate the true role of the Reserve Bank and why it plays a critical role in maintaining financial stability and why it is critical to the economic welfare of South Africans,” he said.

Arguments were also presented by Absa’s counsel Gilbert Marcus SC, who emphasised the economic consequences of the remedial action and its threat of a credit downgrade which would impact poor South Africans most. – Fin24

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Lameez Omarjee
Lameez Omarjee
Parliamentary reporter at Fin24.com
Advertisting

Stella set to retain her perks

Communication minister will keep Cabinet perks during her two months of special leave

Not a sweet deal, Mister

Mister Sweet workers say they will not risk their health, and the lives of others, to continue producing and packaging confectionaries

Covid-19 grounds Nigeria’s medical tourists

The country’s elites, including the president, travelled abroad for treatment but now they must use the country’s neglected health system

Nehawu launches urgent court bid over protective gear for health...

The health workers’ union says the government has rebuffed its attempts to meet about mitigating risks to workers

Press Releases

Rahima Moosa Hospital nursing college introduces no-touch facial recognition access system

The new system allows the hospital to enrol people’s faces immediately, using artificial intelligence, and integrates easily with existing access control infrastructure, including card readers and biometrics

Everyone’s talking about it. Even Kentucky

Earlier this year South African fried chicken fast-food chain, Chicken Licken®, launched a campaign for their wallet-friendly EasyBucks® meals, based on the idea of ‘Everyone’s talking about it.’

New energy mix on the cards

REI4P already has and will continue to yield thousands of employment opportunities

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world