South African police could take legal action against finance minister – Reuters

7 months ago Comments Off on South African police could take legal action against finance minister – Reuters

JOHANNESBURG South African police said on Tuesday that finance minister Pravin Gordhan could face legal action over his refusal to cooperate with a probe into surveillance by the revenue service, escalating a public row and rattling the rand and bonds.

The elite Hawks police unit said it would exercise its “constitutional powers” after Gordhan missed a second deadline to answer questions about a suspected spy unit established while he was head of the South African Revenue Service (SARS).

Gordhan has repeatedly called the investigation a smear campaign aimed at tarnishing his and the Treasury’s credibility and has said he would take legal action to protect himself.

In a strongly worded statement, the Hawks said Gordhan had failed to meet a March 14 deadline to answer questions.

“This is neither a talk-show nor a soapie. We are mandated to investigate without fear, favor or prejudice,” the unit added, resorting to capitals to make its point.

“The minister, for whatever reasons, has failed to meet the SECOND deadline for answering questions and our legal team are forging a way forward which will see the Hawks exercising our constitutional powers.

“The investigations will not be stalled by an individual who refuses to comply with the authorities and demand a preferential treatment,” the statement added.

A Treasury spokeswoman did not immediately respond to a request for comment from the finance minister.

The rand extended losses after the statement was released, trading 3 percent lower at 16.0275 per dollar, the weakest performer in a basket of emerging market currencies. Government bonds also weakened sharply following the news.

“Investors are realizing the fight is real,” Nomura emerging market analyst Peter Attard Montalto said. “Both sides are doubling down and at some point one side will hit the nuclear button.”


Gordhan has said he was unable to answer the questions before a deadline set in the first letter sent to him by Hawks chief Lieutenant General Mthandazo Ntlemeza because he was busy preparing the 2016 budget.

On Monday, Gordhan told a news conference he had not received a second letter from the Hawks, which set a new deadline for him to answer the questions by March 14, but had read about it in a weekend newspaper.

He criticized the leaking of the document to the media, something the Hawks did not deny or confirm in its statement.

Appointed in December to calm investors spooked by President Jacob Zuma’s sudden switch of finance ministers, Gordhan had previously served as finance minister from 2009-2014.

He was head of SARS from 1999-2009, during which time the unit that allegedly conducted illegal surveillance of taxpayers was set up.

Last week he met investors and credit rating agencies in London and New York, seeking to drum up support for Africa’s most industrialized economy, which is at risk of losing its investment-grade status because of low growth and big deficits.

South Africa’s Police Minister Nkosinathi Nhleko has said the questions put to Gordhan by the Hawks do not mean he is under investigation for a crime or will be charged.

Zuma said last month he had full confidence in the finance minister and dismissed “rumors and gossip which insinuate some conspiracy against minister Gordhan”.

(Additional reporting by Tiisetso Motsoeneng; Writing by James Macharia; Editing by Catherine Evans)

South African police could take legal action against finance minister – Reuters}