'According to the Reserve Bank, Mkhwebane has failed to explain properly why she would need that extension — and what explanation she has offered is misleading,' writes Phillip de Wet (Gallo)
Public protector Busisiwe Mkhwebane faces a bruising in court on Friday, if papers from the Reserve Bank and Absa are anything to go by.
Mkhwebane’s legal team is due to ask for a long postponement before she is ready to defend her Ciex report on an apartheid-era lifeboat for Bankorp, later bought by Absa.
In her final report on the Bankorp lifeboat, she infamously directed that the South African Reserve Bank’s mandate in the Constitution be changed.
In a blistering reply to the postponement application, the Reserve Bank on Monday tore into Mkhwebane. “She clearly does not appreciate the impact of her conduct,†Reserve Bank lawyer Corlett Manaka said of Mkhwebane’s approach. “This is not conduct befitting an organ of state in litigation.â€
In a similar affidavit, Absa’s head of litigation Steven Palmer on Monday said Mkhwebane “displays an inappropriate partiality and attitude for the holder of a constitutional office and an advocate†because she had said Absa had been involved in “looting†state funds.
In June Mkhwebane issued a report on an investigation first begun by her predecessor, Thuli Madonsela, several years before, into a complaint that the post-1994 government had failed to act on advice that it could recover an apartheid-era bailout to Bankorp. In sharp contrast to previous investigations of the issue, Mkhwebane instructed that a process should be started to claw back R1.125-billion from Absa ofwhat she considered ill-gotten gains.
She also instructed Parliament to remove the Reserve Bank’s mandate to target inflation so it could, instead, focus on social economic wellbeing exclusively. Both banks, as well as the treasury, reacted furiously, accusing Mkhwebane of risking financial stability while radically misunderstanding the evidence before her and the issues at play.
This week Absa said the report consisted “primarily in the uncritical acceptance of conspiracy theories peddled by a foreign spy in order to promote his own financial gainâ€.
The banks’ challenge to the report had been due to be heard in early December. But on Friday Mkhwebane will formally apply for a three-month extension, which the Reserve Bank believes will push the matter well into the second half of 2018 — a year after the report was first issued.
According to the Reserve Bank, Mkhwebane has failed to explain properly why she would need that extension — and what explanation she has offered is misleading.
In her application Mkhwebane decries the vast amount of paperwork involved in the matter. Yet “her count is wrong and misleadingâ€, said Manaka on Monday, detailing how Mkhwebane’s numbers simply do not add up, and in some instances refer to documents she relied on in compiling her report, and so presumably is familiar with. “The public protector’s claims about the volume of papers in this case is grossly exaggerated,†he said.
Mkhwebane cited the paperwork in the context of the amount of work that had to be done by her new legal team, appointed in October and so almost exactly midway between the launch of the challenges against her report and the date a court was to hear those challenges.
The original legal team was replaced nine days after it failed to secure a postponement of the matter well into 2018. However, when asked about the circumstances of its appointment and what work it had done to date, Mkhwebane’s new legal team invoked legal privilege.
In response, Absa argued that there was no such legal privilege, and that even if there was, Mkhwebane would be entitled to waive it to “take the court into her confidenceâ€.
Absa also urged the court to consider that it and the Reserve Bank had less than one month to prepare papers in the matter, less than Mkhwebane’s new legal team has already had — and considerably less than the six years her office has been dealing with it.
In an affidavit, Mkhwebane also said she requires time to talk to “consultants that help me understand the complex details of the financial markets, including but not limited to the role of central banks†— a role she traversed in her June report.
The Reserve Bank has argued that the report amounts to a sword hanging over its head, which influences markets. Absa has previously said it continues to suffer harm to its reputation as long as the report has not been set aside.
Mkhwebane, on the other hand, is due to argue that it would not be in the public interest for her to go to court ill-prepared in December.
