Public protector accused of wasting public money

Public protector Busisiwe Mkhwebane has been accused of a gross waste of public resources after applying for a postponement of a bid to set aside her Absa-CIEX report, only to withdraw the application hours later and offer to pay punitive costs.

Absa Bank, the Reserve Bank and finance minister strenuously opposed Mkhwebane’s bid to postpone their review application to set aside the drastic remedial action ordered in her CIEX report, which will be heard before a full bench of the High Court in Pretoria on December 5.

They accused her of wasting public money, having a high-handed and dismissive approach, trying to manipulate the court and negatively affecting the already fragile financial markets.

Absa complained that people were demonstrating at its branches following the report and that there was a dark cloud hanging over them with uncertainty if they must pay back R1 billion to government, as directed by the public protector, or not, which affected their clientele.

Absa also strenuously objected to Mkhwebane’s “astonishing and highly inappropriate” allegation in court papers that they “looted state funds” and her refusal to withdraw the statement.

Judge Billy Motlhe ordered the public protector to file her answering affidavit by noon on November 27 and her heads of argument on November 29. He also put the other parties on terms to file further papers.

Mkhwebane said in court papers her previous legal team, including two senior advocates, had withdrawn and claimed her new team needed until February next year to prepare for the case and to compile her answering affidavit.

Her counsel, Panesa Khoza, said it was inappropriate to blame the public protector for what happened in the markets for as long as her remedial action remained in effect, as markets were volatile in any event.

She said the public protector did not intend to enforce the remedial action and the Special Investigating Unit (SIU) had given an undertaking to not proceed with the remedial action (to recover R1 billion from Absa and launch a further investigation). Any of the parties were free to approach the court to suspend the remedial action, she added.

Counsel for Absa Gilbert Marcus SC pointed out the Reserve Bank had already obtained an order setting aside Mkhwebane’s directive that the constitution must be changed to remove the Reserve Bank’s constitutional mandate to keep inflation in check.

He said remarks by the judge in that ruling that the release of the report had immediate negative consequences for the economy, the market and investor confidence was not merely an opinion, but based on undisputed evidence.

Marcus argued the remedial action remained in effect unless it was stayed or set aside and the SIU had an obligation to enforce it.

David Unterhalter SC, for the Reserve Bank, argued the report had cast doubt on the role of the Reserve Bank in fringing stability to the financial system and caused uncertainty in the market at a time of great economic fragility.

He said the court should not allow the systemic harm and the gross waste of public funds any further delay would bring about, especially where the public protector was charged with ensuring the responsible spending of state resources.

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