Zwane called for a judicial investigation into banks in response to their refusal to continue doing business with the Gupta family.
The Presidency said the comments made by Zwane on the work of the inter-ministerial task team established to consider the implications of the decisions of certain banks and audit firms to close down the accounts and withdraw audit services from Oakbay Investments, was made in his personal capacity.
“Minister Zwane is a member of the task team. He does not speak on behalf of Cabinet and the contents of his statement do not reflect the position or views of Cabinet, the Presidency or government. The unfortunate contents of the statement and the inconvenience and confusion caused by the issuing thereof, are deeply regretted,” the presidency said in a statement.
“The presidency wishes to assure the public, the banking sector as well as domestic and international investors of Government’s unwavering commitment to the letter and spirit of the country’s Constitution as well as in the sound fiscal and economic fundamentals that underpin our economy.”
There was a public outcry on Friday morning from opposition parties on appeared to be a call by Cabinet for a judicial investigation into banks. Zwane’s statement suggested that his stance had in fact been endorsed by Cabinet.
Issued late on Thursday night, the minister recommended that President Jacob Zuma should institute a judicial inquiry into allegations that banks acted “unilaterally and allegedly in collusion” when they closed the banks accounts linked to the Gupta family and broke ties with Oakbay Investments.
Zwane headed an interministerial committee (IMC) that has looked into the decision since April, on the stated motivation that the banks’ actions could lead to the loss of 7,500 if the Guptas were forced to close their companies and that investment in general could be negatively impacted.
The committee included Finance Minister Pravin Gordhan but, as Cabinet confirmed, he opted not to participate in its interviews with banks, insurance companies and Oakbay Investments itself.
Apart from recommending an inquiry, Zwane also recommended a review of the mandates of the Banking Tribunal and the Banking Ombudsman.
“Evidence presented to the IMC indicated that all of the actions taken by the banks and financial institutions were as a result of innuendo and potentially reckless media statements, and as a South African company, Oakbay had very little recourse to the law.”
Strengthening the mandates of these watchdog institutions would help prevent other companies from finding themselves in a similar predicament.
In the statement, Zwane went as far as considering the reporting lines provided for in the Financial Intelligence Centre Act and the Prevention of Combating of Corrupt Activities Act as, it said, it was unclear whether the banks and the Reserve Bank had complied with these in the decisions surrounding Oakbay.
He suggested an eventual judicial inquiry should probe the Reserve Bank’s stance on issuing new banking licences.
“Evidence was also presented that these institutions may have placed undue pressure on banks that sought to assist the company by subjecting them to unwarranted auditing processes. It is unclear why the Reserve Bank will not issue new banking licences to other banks and this would need to be given careful attention by the Judicial Enquiry.”