CEOs back #Gordhan – Charges erode positive investor sentiment

CEO Initiative press statement

The CEO Initiative notes with deep concern the announcement by the National Prosecuting Authority (NPA) that the Minister of Finance has been summoned to court, for what is essentially an administrative and human resource matter. We are confident it would have been dealt with at the South African Revenue Services at the time, according to normal processes.

Pravin Gordhan, South Africa's finance minister. Photographer: Christopher Goodney/Bloomberg
Pravin Gordhan, South Africa’s finance minister. Photographer: Christopher Goodney/Bloomberg

Minister Pravin Gordhan is on record as saying that the law must take its course if it should come to him being charged, and we agree with this course of action. However, we remain convinced the Minister has not acted incorrectly. We believe this announcement is part of a campaign against him and the National Treasury, in an effort to make it difficult for them to conduct their core responsibilities of maintaining fiscal discipline, which includes tightening up systems to deter fraudulent activities and creating a conducive environment for sustainably growing our economy for the benefit of all who live in it.

The announcement from the NPA – and its timing – has resulted in a significantly negative impact on the performance of the currency, the stock exchange and the positive sentiment built during the most recent international investor roadshow showcasing South Africa in New York.

This development will undoubtedly make all engagements with ratings agencies in the foreseeable future extremely difficult and erodes the positive progress have made to date.

We appeal to the authorities to put the national interest at the top of the agenda and enable those making a sterling contribution to the nation to continue doing so – for the good of all who live in South Africa.

The CEO Initiative is a collective of leaders from various sectors chaired by Jabu Mabuza, Chairman of Telkom SA. The various workstreams are led by Sim Tshabalala, joint CEO of Standard Bank; Ralph Mupita, CEO of Old Mutual Emerging Markets; Mike Brown, CEO of Nedbank; Adrian Gore, CEO of Discovery; Brian Joffe, Founder of Bidvest; Dr Dan Matjila, CEO of the Public Investment Corporation; Colin Coleman, Managing Director for Goldman Sachs in South Africa and Stephen Koseff, CEO of Investec Group.