Mkhwebane had no business investigating 'lifeboat' matter‚ Reserve Bank tells court

Public protector Busisiwe Mkhwebane.
Public protector Busisiwe Mkhwebane.
Image: SANDILE NDLOVUIphotory

The SA Reserve Bank has gone for the jugular in its attack on Public Protector Busisiwe Mkhwebane’s handling of her investigation into the ABSA/Bankorp ‘lifeboat’‚ arguing that in fact‚ she had no jurisdiction in the matter in the first place.

Advocate David Unterhalter SC‚ for the SA Reserve Bank‚ argued that the public protector did not only act partially and procedurally unfair but also that the transactions happened between 1985 and 1995‚ more than the two years prescribed by the Public Protector Act to initiate an investigation.

He said based on this two-year prescribed rule‚ the matter was outside her ambit.

Mkhwebane‚ Unterhalter argued‚ had failed to demonstrate the “special circumstances” required by the Public Protector Act for her to exercise her discretion in taking up an investigation of an incident that happened more than the two prescribed years.

He said if there were special circumstances‚ Mkhwebane ought to show proper appreciation of the rule‚ demarcate the special circumstances and explain how the discretion was exercised.

“They (reasons) should be extraordinary that it warrants not the application of the rule…there is nowhere in the report where (Mkhwebane) discusses how the discretion was to be exercised‚” Unterhalter told the court.

He said if the jurisdictional attack was sustained‚ then everything that flows from Mkhwebane’s final report must fall.

Unterhalter dismissed the argument by Mkhwebane’s lawyer‚ Advocate Paul Kennedy‚ that Mkhwebane’s findings of illegality and impropriety regarding the transaction were justification for taking up the investigation.

“You can’t justify an exercise of discretion to enjoy jurisdiction by saying it was a right decision ‘look what I have found in the end of the case’. You have to have jurisdiction before you can start the case. You can’t use the yields of the case to justify the adoption of a complaint‚” he charged.

Unterhalter said there was an assumption of jurisdiction by Mkhwebane‚ “simply because there was a desire for discretion”.

The investigation into the ABSA/Bankorp ‘lifeboat’ was initiated during former public protector Thuli Madonsela’s term of office.

ABSA‚ the Treasury and the SA Reserve Bank want the court to set aside the report Mkhwebane released in June‚ in which she ordered ABSA to repay R1.125bn in loans provided to Bankorp‚ which was later acquired by ABSA‚ by the South African Reserve Bank (SARB) during the apartheid era in what became known as the ‘lifeboat scandal’.

The matter continues on Thursday.

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