Judgment on apartheid era bank bail-out goes against Protector Busisiwe Mkhwebane

Public Protector Busisiwe Mkhwebane has lost her fight against Absa in the High Court in Pretoria. On Friday morning‚ the court set aside the remedial action contained in her Absa-Bankorp report and ordered her to pay 15% of the Reserve Bank’s costs in her personal capacity.

“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‚” Judge Cynthia Pretorius said in her judgment.

This was a case where “a simple punitive costs order against her in her official capacity will not be appropriate. This is a case where we should go further and order the public protector to pay at least a certain percentage of the costs incurred on a punitive scale”.

The judge ordered that the public protector‚ in her official capacity‚ pay Absa’s costs‚ on an attorney and client scale‚ including the costs of three counsel.

The public protector was ordered to pay 85% of the Reserve Bank’s costs‚ including the cost of three counsel‚ in her official capacity and 15% in her personal capacity.

The court also set aside Mkhwebane’s direction to the Special Investigating Unit (SIU) to reopen an earlier investigation by the unit into the apartheid-era lifeboat granted to Bankorp “in order to recover misappropriate public funds unlawfully given to Absa Bank in the amount of R1.125-billion”.

Absa bought Bankorp in 1992‚ making it a recipient of the Reserve Bank’s assistance. But an investigation in 2000 by a panel headed by Judge Dennis Davis found that the amount paid by Absa for Bankorp took into account the Bank’s lifeboat‚ and therefore Absa had not benefited.

Following a complaint instituted in 2010 by advocate Paul Hoffman‚ the director of Accountability Now‚ over the government’s alleged failure to implement the “Ciex report”‚ the public protector’s office reopened the case. The report was the work of British Intelligence officer Michael Oatley‚ who in 1997 agreed to help the government recover misappropriated apartheid-era public funds.

In papers‚ the finance minister‚ the Reserve Bank and Absa repeatedly asserted that Mkhwebane’s findings paid no regard to the evidence before her.

The Reserve Bank was seeking a declaratory order that Mkhwebane abused her office by‚ for example‚ holding secret meetings with the Presidency that were not disclosed in her final report. The court did not grant this order.