Public Protector decision next year – judge

A judgment that many believe might prove to be the final nail in the coffin of Public Protector Busisiwe Mkhwebane will be delivered early next year, notes Legalbrief. According to Judge Cynthia Pretorius, one of three judges to hear the Absa-Bankorp case, which pitted Mkhwebane against the Reserve Bank, the Minister of Finance and Absa – all of which are seeking to have her report into this matter, or findings in the report, set aside – will be handed down in late January or early February. A BusinessLIVE report says the case relates to an apartheid-era bailout of Bankorp in which the Reserve Bank effectively extended R1.1bn to the ailing bank in the form of a structured transaction. Absa’s acquisition of Bankorp was effective in April 1992, making it the recipient of the Bank’s assistance. Absa has applied to have Mkhwebane’s remedial action set aside, while Finance Minister Malusi Gigaba is seeking to have the entire report set aside on the basis that Mkhwebane ignored the facts that were before her and reached conclusions ‘manifestly lacking in logic’. The Reserve Bank has gone a step further and is seeking a declaratory order that Mkhwebane abused her office by, for example, holding secret meetings with the Presidency that were not disclosed in her final report. The Reserve Bank is also seeking a costs order against her in personal capacity on the basis that she lied under oath in court papers about the nature of those meetings.

Full BusinessLIVE report

The Reserve Bank’s action sought to vindicate the Constitution, the bank's counsel Advocate Kate Hofmeyr said in her responding wrap-up yesterday. ‘The declarator will vindicate the Constitution. It is a remedy that recognises that the office is bigger than the person who occupies it. ‘On this occasion the requirements of the office to remain independent and impartial were breached. The consequence of the transgressions of the Constitution must be recognised and called for what they are, and in doing so vindicate the Constitution,’ she argued, according to a Fin24 report. This remedy will also ultimately vindicate the Public Protector’s office, added Hofmeyr. ‘The office is built on principles and creates obligations for the person who occupies the office. When the obligations are not met, it must be recognised.’ Hofmeyr suggested there were numerous occasions in which the office was in peril. Hofmeyr contended that the Reserve Bank was not acting maliciously by seeking a declaratory order as it had to act swiftly when its constitutional mandate came under attack. There was immediate, systemic financial harm resulting from the report. ‘The Public Protector’s conduct warrants the declaratory order sought by the Reserve Bank, and the Constitution demands it be granted.’ Absa's counsel Gilbert Marcus SC and Advocate Tembeka Ngcukaitobi, representing the Minister of Finance, also delivered closing replies during the course of the morning. Both tackled the procedural fairness which they said Mkhwebane failed to follow during her investigation.

Full Fin24 report

‘This idea that there is maladministration because of no compliance with the Ciex report is founded on a total legal fallacy‚’ Ngqukaitobi told the court. Ngqukaitobi said had Mkhwebane bothered to do a basic reading of the contract between the government and Ciex – a UK based recovery firm founded by ex-British spy Michael Oatley – she would have noticed that it imposed no recovery obligation on government. He said in fact‚ the contract imposed an obligation on Ciex to find the ‘bounty’ for a commission but that government ended up paying 600 000 British pounds and received nothing in return, notes a TimesLIVE report. ‘(Mkhwebane) commits ... a basic error of law in assuming that an agreement between government and its service provider creates a binding obligation on the part of the government‚ when in fact it does not‚’ Ngqukaitobi said. He said Mkhwebane has now tainted government with a finding that could only be purged through a judicial challenge. ‘The problem is that we now have been stained with a finding of maladministration and improper conduct…the only way it can be purged is through a judicial determination‚’ he added.

– TimesLIVE

Mkhwebane’s contention that Absa had not paid fair value for Bankorp was without factual foundation, according to Marcus, notes a Business Day report. It was, by her own admission, based on an opinion sought after her report into the matter had been published, he said in summing up Absa's case. ‘There is no admissible evidence that Absa was, in the words of the Public Protector, the ‘recipient of an illegal gift’, and that means the remedial action was simply without any factual foundation at all,’ he said. In her report, noted Marcus, Mkhwebane did not dispute that Absa had paid fair value for Bankorp. It was disputed for the first time only in her answering affidavit, based on the opinion of Wits economist Tshepo Mokoka, who was consulted only after the report had been finalised. The report’s findings could not be based on reasons not given in the report, Marcus said.

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