Sarb triumphs over public protector in latest ruling

South Africa’s high court has ruled against the nation’s public protector, Busisiwe Mkhwebane, dismissing portions of a report that found Absa Bank owed the government R1.25 billion ($107 million) and concluding a long-running stand-off with the central bank.

In a final ruling held at North Gauteng High Court in Pretoria on February 16, judge Cynthia Pretorius found Mkhwebane’s report to be biased, deeming her remedial action unlawful while ordering her to personally pay some of her opponents’ legal costs.

“The public protector did not conduct herself in a manner which should be expected from a person occupying the office,” Pretorius said.

“She did not have regard thereto that her office requires her to be objective, honest and to deal with matters according to the law and that a higher standard is expected from her. She failed to explain her actions adequately.”

Pretorius ordered Mkhwebane to pay 15% of the South African Reserve Bank’s (Sarb) costs in her personal capacity, while the remaining 85% will be paid by her office. Her office was also ordered to pay Absa’s legal costs.

Damage done

The ruling concludes a lengthy stand-off between the nation’s central bank and Mkhwebane, which first began in 2016 following the release of the Bankorp report, in which the public protector also attempted to have the central bank’s mandate changed.

Mkhwebane said the Sarb’s mandate should be altered to strip it of the requirement “to protect the value of the currency”, in favour of a broader mandate to protect the “socioeconomic wellbeing” of South Africans.

Both parties appeared in court several times over the following months, before the courts ruled in favour of the central bank. The Sarb’s case received strong backing from government officials and international organisations, as well as a fierce defence from governor Lesetja Kganyago.

But the latest dispute lays to rest Mkhwebane’s accusation the R1.125 billion bailout of Bankorp by the central bank was an “illegal gift”.

“It is necessary to show our displeasure with the unacceptable way in which [Mkhwebane] conducted her investigation as well as her persistence to oppose all three applications to the end,” Pretorius stated.

“In the matter before us, it transpired that the public protector does not fully understand her constitutional duty to be impartial and to perform her functions without fear, favour or prejudice.”

Both the Sarb and Absa had filed court applications to have the report set aside, citing factual inaccuracies and corruption.

They also claimed the public protector lacked the jurisdiction to re-open an investigation given the office was established in 1994 – long after the agreement between the Sarb and Bankorp had been drawn up.

While the latest ruling sets aside portions of the report, it does not dismiss it completely, nor allow for an immediate “declaratory order” that would see Mkhwebane removed from office on the grounds of abusing her power – charges the Sarb had campaigned for.

However, Pretorius said there still may be a case to be made for such a dismissal. “This court will not issue a declaratory order, although it will be possible … to apply … for such an order,” she said.