The Gordhan Saga – my 2c

The “Hawks” investigation of Finance Minister  Pravin Gordhan is having a bit of a ripple effect. This has caused a clear rift between state and business. Weeks after the worst performance in an election, the ANC is succumbing to even further internal divisions – Cyril Ramaposa  (believed to be a possible candidate to replace Zuma after he steps down as the ANC’s leader and eventually as President.  Openly declaring his support for Gordhan is just one thing.

We need to root out whether this public dispute is of a personal vindictive nature or whether there is legitimate cause for concern, to the best of my knowledge and based on what has been made public by the press, this all started when Zuma was pressured into hiring Gordhan in Dec 2015 – after the Nhlanhla Nene debacle.

To give you some background, Pravin Gordhan ran SARS as Commissioner between 1998 and 2009, he later oversaw it politically when he was Finance Minister between 2009 and 2014. Moyane was appointed as SARS boss back in 2014 to allegedly clean up “the mess” at SARS,

After his recent re-appointment as Finance Minister Gordhan pleaded to Zuma to fire the country’s Tax Chief, Tom Moyane, now whether this was a legitimate request, as Gordhan’s spokesperson Phumza Macanda has stated, or simply an effort to prevent certain facts to come to light remains to be seen.

 

There has been an ongoing battle between the SARS boss and our Finance Minister, predominantly Monyane side has claimed that this is regarding a KPMG report that they want to release which will reinforce the allegations of a so-called “rogue investigative unit that was set up within SARS” and that this was overseen by Ivan Pillay – a close comrade of Mr. Gordhan’s 

While the Gordhan side, claims that the whole situation is relating to the operational overhaul and certain report disclosures Moyane’s camp want to make. The truth I believe remains to be seen.

According to a Sunday Times article in late January of this year, “there were 2 independent probes that preceded the KPMG report, which forced several former SARS officials close to Gordhan - including Pillay and former risk and enforcement executive Johann van Loggerenberg - to resign after the rogue unit was uncovered.” - Cited from Sunday Times Article 24 January 2016

The unfortunate thing here is that we as the public, do not have enough information to make informed comments. There are ties to all sorts here, Moyane and Zuma go as far back as their days in exile. Zuma and Gordhan also once allies, worked together in the ANC's underground operations in the 1980s, but in recent years have fallen out several times.

SARS as a whole has been plagued by scandal for a long time and quite frankly there may yet be more skeletons to come a bouncing out the closet. For whatever reason, if there was a need for an additional investigation unit during those years – which were very politically volatile. This would’ve been to uncover upper-level corruption.

There are so many social and economical concerns here, on a far greater scale. The most unnerving thing here is what our Foreign investment sector will do, yesterday we saw the sale of quite a few shares in the local banks by foreign investors, the Rand has also weakened substantially in the month of August. On the 15^th a dollar cost you R13.24 and it looked positive, checking the markets this morning, 31^st August a $ runs at R14.52.  It may just be time to hold your dollars again people, because I don’t see the downward trend stopping any time soon.

Our agricultural industry is still suffering with the effects of the drought and has projected 0% growth for the year, the continuous protest actions, from both public and private sectors over the last few years, coupled with political instability that currently gets hyped up in international news papers regarding the “tiff” between our President and Finance Minister is surely not instilling confidence in investors, add to that the Gupta’s who are looking to sell all of their shares in South African Business is just another factor in this potjiekos pot we call the South African economy.