/ 18 July 2022

Mkhwebane did SSA’s bidding on Bankorp-CIEX report, MPs hear

Public Protector Busisiwe Mkhwebane Appears In Court On A Perjury Charge
Suspended Public Protector Busisiwe Mkhwebane. (Photo by Gallo Images/Lefty Shivambu)

Suspended Public Protector Busisiwe Mkhwebane’s infamous recommendation in 2017 that the mandate of the South African Reserve Bank (Sarb) be amended came straight from the State Security Agency (SSA), the section 194 committee probing her for misconduct heard on Monday.

Advocate Tebogo Kekana, a former senior investigator in the public protector’s office who worked on the Bankorp-CIEX investigation, testified that the recommendation was not in the preliminary report on the matter but materialised after two unusual meetings with members of the SSA.

Kekana said at the first meeting in May 2017, with SSA officials Arthur Fraser and James Ramabulane as well as state security minister at the time David Mahlobo, he was ordered not to record the conversation or to take notes.

This instruction came from Mkhwebane and he was “extremely surprised” by it as the custom was to the contrary. He was surprised too that, prior to this meeting, Mkhwebane had met privately with Mahlobo.

“In a meeting of that magnitude it was not custom, or I found it odd, for one to have a one-on-one meeting with an implicated party … that is what I found odd about incidents.”

Kekana said he was instructed by Mkhwebane shortly thereafter, while he was drafting the final report on the matter, to include a recommendation that the Constitution be amended to allow the nationalisation of the Sarb, though there was no suggestion to this effect in the preliminary report.

“She did give me an instruction to do that.”

Under questioning from evidence leader advocate Nazreen Bawa, he said there had been nothing in the meeting with the SSA to which he could link the instruction given to him. He then prepared several drafts of the final report but did not include a mooted recommendation that the central bank be nationalised.

“At the time of work, I did not believe that recommendation was relevant for our investigation,” he said, adding that he doubted it was legally sound. 

He presented Mkhwebane with a draft version of the final report and she informed him the SSA was preparing a submission to the effect that the central bank must be nationalised. 

At a second meeting with SSA officials on 6 June 2017, the agency’s Maiendra Moodley, who Mkhwebane introduced as an economist, handed her a single sheet of paper. It contained a recommendation on amending the constitution to alter the mandate of the Sarb that made it into the final report released about 10 days later.

This included that the primary objective of the central bank must be to promote economic growth and ensure the “economic well-being” of citizens and that, in striving for this, the bank must hold regular consultations with the cabinet. Mkhwebane then told Kekana to insert the recommendation received from Moodley in the final report, which was published on 19 June 2017.

“I did so,” he said. “Accordingly, the remedial action contained in the final CIEX investigation report did not come from the office of the public protector but rather from the SSA.”

Kekane testified that the instructions from the SSA were never disclosed in the course of the high court review of the report as Mkhwebane did not want earlier drafts of the report in the rule 53 court record. When her lawyer objected to this approach, she briefed new counsel.

In 2018, the Pretoria high court set aside the report, following review applications by both the Sarb and Absa. The report recommended that Absa repay R1.125-billion for a lifeboat provided to Bankorp by the reserve bank during the apartheid era. The court heard that Mkhwebane had refused to meet with Absa prior to the publication of the final report but had met with Black First Land First, a strong proponent of compelling the bank to repay the sum. Kekana confirmed this meeting.

The Sarb particularly sought a declaratory order that Mkhwebane abused her powers.

While the litigation was underway, Kekana was moved out of the office to Mhwebane’s office and transferred to the provincial investigations unit, on the basis that he was meddling with the legal defence.

He subsequently became the lead investigator in the probe into the Estina dairy farm scandal. His supervisor on this investigation Reginald Ndou informed him that Mkhwebane did not want crucial information derived from the Gupta leaks emails used in the investigation, he told the committee.

She also ordered that no findings were to be made against politicians, including former Free State premier Ace Magashule and Mosebenzi Zwane, who was the MEC for agriculture and later became minister of mineral resources.

In February 2018, she directly told a meeting of the investigators that she wanted information about inflation of the prices of goods in the project, as well as the identities of beneficiaries, excised from the report. This was eventually done, with the effect that officials implicated in the preliminary report on the project were exonerated.  

Kekana’s testimony on Monday validated the submission made to the court by the Counsel for the Advancement of the South African Constitution that Mkhwebane had deliberately curtailed the findings on the Estina saga to spare those implicated in the R200-million scam in earlier versions of the report.

Like the CIEX-Bankorp report, the one on Estina was overturned by the high court

In both instances, Mkhwebane had taken over investigations that had begun under her predecessor Thuli Mandonsela. The CIEX-Bankorp probe followed a request from Accountability Now in 2010 for an investigation to establish whether the government had failed to act on a report by CIEX, a private British intelligence company, on the reserve bank’s bailout of Bankorp.

In the legal review, counsel for the Sarb argued that the mere fact that Mkhwebane was discussing “the vulnerability” of the central bank with intelligence agents was cause for concern. Her office retorted that the meeting was intended to inquire about SSA’s contract with CIEX, although Kekana’s handwritten note from the 6 June meeting, which became part of the court record, contained the catchwords “independence” and “constitutional obligations”.

Kekana was suspended in August 2019. He said he had been harassed by Mkhwebane and had his laptop confiscated. It was later returned to him with no trace left of emails she had sent him in 2017. He made a protected disclosure about what he regarded as “troubling instances” of impropriety in the CIEX investigation.

The court rulings on the Bankorp and Estina reports were among those flagged by a panel appointed by parliament as prima facie evidence that Mkhwebane has to answer charges of misconduct and incompetence in an inquiry where she risks impeachment.

Mbkwebane’s counsel, advocate Dali Mpofu, objected to Kekana’s testimony on the grounds that it constituted double jeopardy because he is a witness against her in her perjury trial. He was overruled. 

He also submitted that there was nothing wrong with her meeting with Mahlobo as it may have been no more than “an informal chit-chat”.

Mpofu questioned Kekana about the context in which the public protector and her office discussed the vulnerability of the reserve bank, and the witness replied that as far as he remembered, the conversation focused on the apartheid past where the bank had been prone to “looting”. 

He put it to Kekana that, unlike Absa, the SSA was not an implicated party in this probe.

Kekana said this was not entirely correct, as questions were asked as to what they did regarding the implementation or monitoring of that contract.

“According to my view they were an implicated party as they were the ones that signed the contract and had to make sure that that contract had to have value for money.”

As his cross-examination drew to a close for the day, he asked Kekana to explain what he meant with nationalisation of the Reserve Bank. Kekana said he was never sure why Mkhwebane wanted this in the report.

“I really didn’t know what I was complying with but I still did not understand the meaning or the relevancy of it in our investigation.”

Mpofu said this was because Mkhwebane never instructed that such a finding be made.