PRETORIA: Pravin Gordhan, South Africa’s Finance Minister and guardian of the public purse, is in trouble. He is being hit with dubious charges of criminal misconduct. Gordhan has received a summons to appear in court on charges of fraud. The fraud charges relate to alleged severance payments made to two senior executives at the South African Revenue Service (SARS), when he was in charge of South Africa’s tax collection service 10 years ago.
There are allegations that he granted – irregularly – an early retirement package to a senior official working under him in his previous role as head of the SARS. Gordhan has denied the allegations saying they have no basis and are politically motivated. In a press conference prosecutor Shaun Abrahams said Gordhan was being probed for his role in setting up a surveillance unit at the tax department around the same time. The Indian-origin finance minister had earlier described that allegation as political mischief and has accused the special police unit conducting the probe, known as the Hawks, of trying to intimidate him.
Abrahams has denied any political interference in the matter. Few South Africans appear to believe that, least of all those in the financial sector. The summons requires the finance minister to appear in court on November 2, 2016, following his budget policy statement later this month. Gordhan will probably become the first government minister in South Africa to be tried while in office, unless President Zuma shows him the door before that. Gordhan’s efforts to rein in government spending have won him respect in the financial markets. News of his summons had rattled the markets and the South African rand fell more than 3%. Shares in leading banks crashed over 5% and bond yields spiked.
It’s a case of déjà vu. Last December President Zuma had replaced another well-regarded finance minister (Nhlanhla Nene) with a more pliant appointee (David van Rooyen), a move that was widely criticised sending the rand to record lows and causing the stock market to tumble. The turmoil eventually led to Gordhan’s appointment as a safe bet. However, since almost the day he re-assumed charge at the finance ministry, Gordhan has been hounded by the National Prosecuting Authority (NPA) on grounds that appear insignificant at best, given the monumental challenges facing the rainbow nation.
Gordhan is among a diminishing cadre of officials in whose integrity South Africans still have confidence. He has fought to control wasteful spending and corruption at a time when the economy is stagnant and social tensions are rising. The widely-held perception is that the decision to go after him is part of a plot by Zuma to rid himself of one of the last remaining checks on the abuse of power. Zuma’s scandal-hit presidency draws towards its close in 2019. The allegations mounting against Zuma, who must contest the ANC leadership next year, are far more serious, although prosecutors are loath to take them up – be it his alleged nexus with the Guptas, a powerful business family, or for that matter over 780 charges of fraud, racketeering and corruption against him.
Zuma wants to ensure that his inheritors in the African National Congress are allies willing to protect his interests once he ceases to be the president. However, Gordhan has in his corner many leaders in and outside the ANC who have denounced the decision of the NPA to charge him. With Zuma becoming increasingly isolated, political observers believe the anti-Zuma faction in ANC may use Gordhan’s court appearance to force Zuma to give up the country’s highest office.
It is also seen as an opportunity for supporters of Deputy President Cyril Ramaphosa to launch his campaign to succeed Zuma as ANC president in 2017. Zuma is believed to prefer his former wife and African Union Commission chair Nkosazana Dlamini-Zuma as the next ANC president. But the perceived victimisation of Gordhan could work against the pro-Zuma faction the same way the perceived victimisation of Zuma worked against former president Thabo Mbeki after he sacked Zuma as the deputy president in 2005.
Then, Zuma was implicated in a corruption case relating to the arms deal. At the time, Zuma supporters also blamed the Mbeki government for “concocting” rape charges against Zuma. The Zuma faction used both the corruption and the rape trials to stand behind him. Today the shoe is on the other foot. Zuma is now being accused of abusing state resources to target his political opponents in the ANC and the government. ANC national executive committee member and Deputy Minister of Health Joe Phaahla implied this week that Zuma was using NPA head Shaun Abrahams and the Hawks to get rid of Gordhan.
“It’s a shame (the charges against Gordhan). (What’s happening now) is not different to what happened in 2003, when the NPA said they have a (prima facie) case (against Zuma) but it was not winnable in court. This thing does not have credibility. I have no doubt in my mind that somebody has put pressure on Abrahams. This is about getting rid of Pravin,” said Phaahla, without mentioning Zuma or anyone else by name, to the Mail & Guardian. Phaahla added there was nothing criminal about what Gordhan did and that it could have been an administrative misdemeanour.
“We (the ANC) said if comrades face serious allegations, the issues must be taken to the integrity commission. We can’t (have) a policy where people can (use it to) settle scores.” He said the Gordhan case must be presented to the committee and, if it is found to be harming the ANC, then action must be taken. “But there is no such suggestion (that Gordhan’s case is damaging to the organisation),” said Phaahla. Former ANC treasurer general Mathews Phosa said Zuma, but not Gordhan, should step down.
