Hawks desperation suggests Zupta dam is bursting. First Mentor, who’s next?

If you never realised it before, yesterday’s 3% plunge in the exchange rate should get your attention: South Africa’s future is on the line. Believe it. There is no middle ground. The result will be binary. Either those carrying Nelson Mandela’s mantle, those committed to rooting out patronage, crony capitalism and corruption will win the day. Or Dark Forces will turn this beautiful country into the tinpot dictatorship so many of the bigoted critics have long predicted. A leading businessman with intimate knowledge of what’s going down confided this week the “forces for good” are expanding. It certainly looks that way. The Presidency is scrambling to shore up an indefensible position after another bombshell exploded yesterday. This time is came from a long forgotten source, Parliament’s erstwhile public works committee chair and former ANC MP

Former ANC MP Vytjie Mentor. Pic: Facebook
Former ANC MP Vytjie Mentor. Pic: Facebook

Vytjie Mentor. In his first statement Zuma’s spin doctors say the President has no idea who she is. Then they maintain she never accompanied him on a State Visit to India, oops, they meant China. Or if she did, it was not as one of those Zuma officially recognises, members of in his bloated cabinet. For a man of the people, not knowing such an important member of his party is almost as bad as actually admitting that he was in the room next door. You know, the man-cave in the Gupta Saxonwold complex where Zuma entertains himself while the Guptas allegedly horse trade with potential cabinet ministers. Raising the obvious question of whom else in Zuma’s cabinet made similar deals? With so much at stake it’s not surprising the Zuptas are using everything in their power to retaliate. The supposedly politically independent Hawks have been set onto Pravin Gordhan, threatening all kinds of retribution. Gupta Media is firing its pea-shooter at anyone within range (Peter Bruce and I coming in for special treatment as we’ve apparently been “captured” by “white capital”). But all the bluster on earth won’t stop the truth emerging. As Steve Jobs bet when launching iTunes, people are inherently good. Deep down inside we all want to do right, to tell the truth. Especially after having been abused by those with power. Sometimes they just need a little nudging, and in Pravin Gordhan and now Vytjie Mentor, there is something to cling onto. And when the dam breaks, it is sure to be a flood. Those attacking Gordhan will, in due course, have to answer to the nation. Much like the once all powerful Brazilian leaders are now discovering, South Africa might be young and often scores own goals, but it has a solid platform. This is a Constitutional Democracy where the rule of law is the final arbiter. Not some sleazy crony capitalists. Hope Springs.  – Alec Hogg

By Stella Mapenzauswa

JOHANNESBURG, March 15 (Reuters) – South African police said on Tuesday finance minister Pravin Gordhan may face legal action for not cooperating with an investigation of surveillance by the revenue service, escalating a public row and rattling the rand and bonds.

Guptas doing business in South Africa. More Zapiro magic at www.zapiro.com.
Guptas shopping around for a finance minister. More Zapiro magic at www.zapiro.com.

In a tussle that has raised concern about the direction of policy in Africa’s most industrialised but ailing economy, Gordhan hit back, accusing police of threatening him.

The elite Hawks police unit said it would exercise its “constitutional powers” after Gordhan missed a second deadline to answer questions about a suspected spy unit established while he was head of the South African Revenue Service (SARS).

Gordhan has repeatedly called the investigation a smear campaign aimed at tarnishing his and the Treasury’s credibility and has said he would take legal action to protect himself.

In a strongly worded statement, the Hawks said Gordhan had failed to meet a March 14 deadline to answer questions.

Read also: Gordhan slams Hawks: No regard for economic, social welfare of SA

“This is neither a talk-show nor a soapie. We are mandated to investigate without fear, favour or prejudice,” the unit added, resorting to capitals to make its point.

“The minister, for whatever reasons, has failed to meet the SECOND deadline for answering questions and our legal team are forging a way forward which will see the Hawks exercising our constitutional powers.

“The investigations will not be stalled by an individual who refuses to comply with the authorities and demand a preferential treatment,” the statement added.

In response, the Treasury said it was “factually incorrect” that Gordhan had failed to respond to a second letter, reiterating he had not received one.

“Notwithstanding that the Hawks have not responded to the minister’s lawyers’ representations for further clarity, the minister has nonetheless instructed his legal team to prepare an adequate response,” it said.

Rand, bonds tumble

The rand fell more than three percent to 16.0400 per dollar after the Hawks statement. Government bond yields jumped more than 30 basis points.

“Investors are realising the fight is real,” Nomura emerging market analyst Peter Attard Montalto said. “Both sides are doubling down, and at some point one side will hit the nuclear button.”

Gordhan has said he could not answer questions before an initial deadline set by the Hawks because he was busy preparing the 2016 budget. On Monday, he told a news conference he had only read about a second letter in a weekend newspaper.

He criticised the leaking of the document to the media, an accusation the Hawks did not deny or confirm in their statement.

Appointed in December to calm investors spooked when President Jacob Zuma abruptly switched finance ministers, Gordhan had previously served as finance minister from 2009-2014.

Read also: Zuma v Gordhan down to the wire: President encourages Hawks investigation

He was head of SARS from 1999-2009. During that time, the unit that allegedly conducted illegal surveillance of taxpayers was set up, investigating authorities say.

Last week, Gordhan met investors and credit rating agencies in London and New York, seeking to drum up support for South Africa, which is at risk of losing its investment-grade status because of slow growth and big deficits .

“This is absolutely the last thing South Africa needs right now. The economic backdrop is challenging enough; no need to top it off with more political drama,” Anne Fruhauf, a Southern Africa analyst for Teneo Intelligence, told Reuters.

South African Police Minister Nkosinathi Nhleko has said the questions put to Gordhan by the Hawks do not mean he is under investigation for a crime or will be charged.

Zuma said last month he had full confidence in the finance minister and dismissed “rumours and gossip which insinuate some conspiracy against minister Gordhan”.

But the latest skirmishes could hurt Pretoria’s efforts to avert a credit downgrade. Standard & Poor’s and Fitch already have the country just one notch above junk status. Moody’s said last week it would put South Africa’s Baa2 rating, two levels above sub-investment grade, on review for downgrade. It is due in the country this week.

“This is not a great time to remind Moody’s of the civil war going on inside the government,” Capital Economics Africa analyst John Ashbourne said.

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