PUBLIC protector Busisiwe Mkhwebane’s report on an apartheid-era bailout of Bankorp was lambasted by the counsel on the first day of the court hearing aimed at having the report set aside.
The Reserve Bank applied to the North Gauteng High Court to have the whole report set aside – saying it was flawed and motivated by Mkhwebane’s personal bias against the central bank. It has been joined in its action by the Treasury and Absa. In addition, it has asked the court for punitive costs against Mkhwebane personally in a case in which the arguments have strayed from the legal to the personal with legal documents accusing her of personal bias against the Bank.
Mkhwebane’s report maintains that the lifeboat loan given to Bankorp was illegal and that the Special Investigating Unit probe should be reopened to ensure the misappropriated public funds of R1.1bn are recovered. Advocate Gilbert Marcus for Absa argued in front of a full bench that far from an independent investigation, Mkhwebane’s actions showed her bias against Absa.
They argued she spent more time with Black First Land First (BLF) and the Presidency in gleaning their reactions to the report than with Absa. In particular, Marcus said that she was influenced by the BLF which was had been distinctly adverse to Absa. In addition, the report was factually incorrect, he said, in that the bank had paid fair value on the acquisition of Bankorp and the debt had been discharged.
In addition, Carroll Steinberg, also acting for Absa, said that the public protector’s role was to make “findings and recommendations” and instead had placed a duty on the SIU to intervene – something which was prohibited by the Public Protector’s Act. Counsel for the finance minister, Thembeka Ngcukaitobi, argued that it was important that the public protector did not abuse her powers and was procedurally fair.
At least three people explained to her about the bailout including former president Thabo Mbeki, former Bank governor and Frank Chikane. Mkhwebane misrepresented the CIEX agreement and Mbeki paid £600 000 (R10.8m) and ended the contract with CIEX due to non-performance because no money was recovered.
Ngcukaitobi said the government’s priority at the time was stabilising the economy and hit out at Mkhwebane by quoting former finance minister Trevor Manual, saying the report seemed more like a “collection of thoughts” than a report. On helping the poor with the recalled funds Ngqukaitobi said: “It is not as if the R1.25bn would make the sins of apartheid suddenly disappear.” Advocate Kate Hofmeyr for the Bank asked the court to find that there had been a breach of the Constitution by the public protector. The hearing continues.