Tuesday, October 11, 2016

South African Prosecutors Summon Finance Minister

South African prosecutors summon finance minister

Pravin Gordhan to face fraud charges over an alleged rogue unit of the revenue service
South African prosecutors have summoned Finance Minister Pravin Gordhan over investigation in to tax authority unit © Bloomberg
South African prosecutors have summoned Pravin Gordhan, the finance minister, to charge him with fraud following an investigation into an alleged rogue unit of the revenue service that was set up when he headed the tax authority.
News of the summons on Tuesday caused the rand to fall by more than 3 per cent against the US dollar. Many analysts have viewed the probe into the investigative unit of the South African Revenue Service (Sars) as part of a battle between factions in the government over the influence of President Jacob Zuma.
Mr Gordhan said at a press conference that the Hawks, a special police unit, had come to his home to hand his family the summons. He added that he would personally wait for the summons and could appear in court on November 2.
“The Hawks are at it again,” he said. “They choose the budget period to do these things after we have met investors.”
Mr Gordhan has repeatedly accused the Hawks of seeking to intimidate him and the Treasury since he was reappointed to the finance ministry in December.
He is due to deliver the medium-term budget later this month at a time when South Africa is grappling with stagnant growth and rampant unemployment and poverty.
Last week, Mr Gordhan told the FT Africa summit that regarding the investigation “there’s no case really, there’s just a lot of noise” and that it was part of a political conflict within the government.
Shaun Abrahams, the national director of public prosecutions, said on Tuesday that Mr Gordhan had stated the investigative unit at Sars — which is at the heart of the Hawks’ probe — was set up legally, but it had “acted in a strange and covert manner”.
Establishing the unit was in conflict with South Africa’s constitution, Mr Abrahams said, adding the investigation was “advanced and ongoing”.
He said the fraud charges against Mr Gordhan were related to him wrongly approving the early payment of a pension to a Sars employee.
Many analysts believe President Zuma is trying to replace Mr Gordhan with a more pliant appointee at the Treasury, which has been calling for more transparency in big state-owned enterprises including Eskom, the power utility.
The summons has come just days before South Africa’s public protector, who is responsible for examining allegations of misconduct in public life, is expected to announce details of an investigation into alleged “state capture” of the country’s institutions.
In August, Mr Gordhan received a summons to appear before the Hawks and have his rights read to him in connection with the Sars investigation, although he was not charged. Mr Gordhan declined to appear.

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