Mkhwebane's CIEX findings a fallacy‚ court told

Public Protector Busisiwe Mkhwebane
Public Protector Busisiwe Mkhwebane

The National Treasury has rubbished Public Protector Busisiwe Mkhwebane’s findings that government failed to recover the R1.1-billion Absa/Bankorp ‘illegal gift’‚ arguing that government had no obligation to recover the funds.

Finance Minister Malusi Gigaba’s lawyer‚ Advocate Tembeka Ngcukaitobi told the High Court in Pretoria on Thursday that the findings of maladministration and improper conduct on the part of government were based on a legal fallacy.

“This idea that there is maladministration because of no compliance with the CIEX report is founded on a total legal fallacy‚” he said.

Ngcukaitobi said had Mkhwebane bothered to do a basic reading of the contract between the SA 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.

“The problem that (Mkhwebane) commits here‚ she 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‚” Ngcukaitobi 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 said.

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 full bench of judges - Cynthia Pretorius‚ Nomonde Mngqibisa-Thusi and Dawie Fourie - is expected to deliver judgment early next year. 

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