Dispute over apartheid-era bailout escalates in South Africa

Barclays Africa said it planned to issue a statement. “The Reserve Bank has consulted its legal team and has been advised that the remedial action prescribed by the Public Protector falls outside her powers and is unlawful”.

Currently, the Sarb’s primary aim was to protect the value of the rand in the interests of balanced and sustainable growth, a key factor in inflation-targeting.

Any decision to change the central bank’s mandate would “depend on the politicians”, he said. “The Ministry of Finance had a duty as obliged by section 37 of the South African Reverse Bank Act of 1989. this failed to adhere to section 195 of the Constitution by failing to promote efficient and effective public administration”. Absa bought Bankorp for 1.23 billion rand ($95 million), with the central bank having loaned about 1.5 billion rand to Bankorp in total.

Mkhwebane was delivering her findings against Barclays Africa, and it was unclear why deviated into monetary policy.

The proposal comes at a “sensitive time and is highly risky”, Peter Attard Montalto, an economist at Nomura International, said by email.

“The public protector can’t order parliament to change legislation, including the constitution”, Pierre de Vos, a law professor at the University of Cape Town, said by phone.

“The remedial action proposed will have a negative impact on the independence of the Reserve Bank”.

The Democratic Alliance (DA) has requested that Public Protector, Busisiwe Mkhwebane, release various reports pertaining to longstanding Gupta investigations following an 8-month dry spell on the subject matter.

She wants Absa to repay R1.125bn, a move the bank refutes as it believes it has paid all money owed. It then provided Absa with a further R2.25 billion in bailouts from 1992 to 1995. Absa‚ which has not yet seen the report that contains the order‚ said it would study it before a possible legal review.

Mkhwebane says that her office is finalising the various processes related to the State of Capture review application.