Johnathan Paoli
The South African Reserve Bank (SARB) on Monday cleared President Cyril Ramaphosa of any wrongdoing in the Phala Phala forex scandal.
The bank said it finalised its investigation and report into the Phala Phala scandal on 14 of August.
The investigation into whether the President broke any laws when millions of Dollars were found stashed in his furniture, follows allegations made by former Correctional Services director General Arthur Fraser in June last year, in addition to subsequent complaints made to SARB from political parties such as the ATM, UDM, and the DA.
The SARB investigation took almost a year and it said on Monday in a statement that legislative requirements constrained the investigation to a private internal report and, therefore, not available to the public.
But the Reserve Bank said in light of the significant public interest on the matter being investigated, it declared its alleged moral compulsion to share certain information regarding the investigation.
The investigation conducted by the Financial Surveillance Department (FinSurv), within SARB, was composed of two phases, namely an initial consideration of internal information and databases and the analysis of cross-border foreign exchange transactions over the specific period; followed by a more comprehensive phases which required the requesting and receipt of additional information, conduction of interviews with various individuals and liaising with concerned parties.
The bank declared that the year-long investigation, allegedly limited to the mandate of SARB and FinSurv, revolved primarily around the question of whether there were exchange control violations in terms of the Exchange Control Regulations of 1961, in respect of the foreign currency allegedly stolen from the Phala Phala farm on 9 February 2020.
Section 6(1) of the Regulations states that: “Every person resident in the Republic who becomes entitled to sell or to procure the sale of any foreign currency, shall within 30 days after becoming so entitled, make or cause to be made, a declaration in writing of such foreign currency to the Treasury or to an authorized dealer.”
SARB referred all other possible criminal allegations linked to the scandal to other institutions involved.
The initial report confusingly found that due to the incomplete nature of the transaction, it could not find any contraventions and therefore cleared the President of any wrongdoing:
“On the facts available to it, the SARB finds that there was no perfected transaction and thus the SARB cannot conclude that there was any contravention of the Exchange Control Regulations (Regulation 6(1)) by Ntaba Nyoni Estates (the entity involved) or for that matter by the President, because the SARB has concluded that the transaction in question was subject to conditions precedent which were not fulfilled, and therefore there was no legal entitlement, within the meaning of Regulation 6(1), on the part of Ntaba Nyoni Estates CC, to the foreign currency.”
The precedent conditions being referred to being that Sudanese businessman Hazim Mustafa did not receive the 20 buffalo in the transaction, which was initially as a result of Covid-19 related logistical problems.
Ramaphosa’s spokesperson Vincent Magwenya said on Monday the Presidency has noted the conclusion of the Phala Phala investigation and subsequent findings by SARB.
Opposition political parties were not convinced by the SARB’s report and called it a cover-up.
UDM President Bantubonke Holomisa described SARB’s findings as a ‘fence-sitter’.
“Fence sitter-findings by the Reserve Bank. “Not perfected transaction”. What is a perfected transaction? Who must account for the “not perfected transaction,” Asked Holomisa
ActionSA leader Herman Mashaba said that the party is currently in discussions with lawyers around concerns over possession of undeclared foreign currency, despite the SARB’s open-ended report.
“We firmly believe the SARB investigation is another attempt to cover up President Ramaphosa’s involvement in the burglary. How is it possible that $580,000 (or $4 million as Arthur Fraser has alleged) can be hidden away in a couch without our financial agencies being aware of it?” Asked Mashaba.
In addition, the party said that they were dismayed by SARB Governor, Lesetja Kganyago’s decision to keep the investigation private, despite his claim that this is a legislative requirement and not an executive decision.
“We remain concerned that government entities are being used in an attempt to clear President Ramaphosa, despite his very own VIP unit embarking on an off-the-books and possibly illegal investigation into the burglary,” Mashaba said.
Mashaba vowed to ensure that Ramaphosa is accountable.
“ActionSA will continue to follow all possible avenues to ensure that the President does not get away with his possible unlawful actions, and seek to ensure that the SARB report is released publicly. We have already asked the National Assembly, SARS and SARB to hold the President accountable and will investigate other avenues at our disposal.
“We remain concerned that government entities are being used in an attempt to clear President Ramaphosa, despite his very own VIP unit embarking on an off-the-books and possibly illegal investigation into the burglary,” he said.
SARB report followed a Parliamentary Section 89 report led by retired Chief Justice Sandile Ngcobo which concluded that Ramaphosa has a case to answer and may have committed a serious violation of anti-corruption laws and the Constitution.
Another earlier report by the South African Revenue Services (SARS) confirmed in March that it has no record of the $580 000 allegedly brought into South Africa by a Sudanese businessman Hazim Mustafa for the purchase of buffaloes.
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