POLITICS

Gordhan's Gambit: Taking On The Guptas

The minister of finance explains the assault on National Treasury and why he is challenging the politically connected Gupta family in court.

26/03/2017 19:13 SAST | Updated 28/03/2017 08:54 SAST
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The bitter political conflict between constitutionalists and so-called rentseekers will come to a head this week when the Gauteng High Court in Pretoria will consider an application by Pravin Gordhan to order the influential and connected Gupta family to back off from National Treasury.

And Gordhan –- who will be travelling to London and New York on Monday to sell South Africa Inc to investors –- believes South Africans must sit up and take note of events in case number 80978/16, the matter between the Minister of Finance, Oakbay Investments and 20 others, including the country's largest banks. [President Jacob Zuma subsequently summoned Gordhan back from London.]

The question South Africans must ask is who is protecting 'what' . . . or defending 'what', or hiding 'what' in this kind of environmentMinister of Finance Pravin Gordhan

Gordhan is seeking a declaratory order which confirms that the executive may not intervene between a bank and its private client.

"The question South Africans must ask is who is protecting 'what' . . . or defending 'what', or hiding 'what' in this kind of environment," Gordhan told Huffington Post South Africa in an interview.

In the wide-ranging conversation the minister said:

  • Political pressure and "underhand methods" were brought to bear on Treasury after it made it clear it could not help the Guptas with the banks;
  • Groups and individuals have gone to "extraordinary" lengths to discredit him and his department;
  • The "new" leadership of the South African Revenue Service (Sars) needs to be educated about "their mission in life"; and
  • South Africa is not facing a tax revolt, even though the Budget's tax proposals were heavily criticised.

Gordhan and Treasury have been harassed, harangued and hassled ever since he made his return to 40 Church Square –- Treasury's headquarters in Pretoria –- after President Jacob Zuma's disastrous removal of Nhlanhla Nene as finance minister in December 2015.

Over the last 15 months he has been targeted by the Hawks' disgraced head Major-General Berning Ntlemeza, manhandled by the National Director of Public Prosecutions Shaun Abrahams, charged with corruption and was the subject of a concerted smear campaign by #PaidTwitter, fake news and certain news outlets.

South Africans need to take note of the fact that for a significant period of time there was a mobilisation of certain sectors in the business community and the media directed at Treasury.Gordhan on the background to the application in the Gauteng High Court in Pretoria

But the Guptas' objection to a decision by the country's major banks to stop providing banking services to Oakbay and its affiliates provided Gordhan with the perfect opportunity to force details into the open of the war against Treasury -– and, by extension, the offensive against rule of law and good governance.

We meet outside an executive ground-floor boardroom at the consulting firm Deloitte in Woodmead, Johannesburg. Gordhan is taller than he appears on television and looks dapper in a pinstripe charcoal suit (the jacket's top button fastened), white shirt and a red tie.

"Let me take this away," Gordhan says, clearing the circular table of dirty cups and empty water bottles left over from the 90-minute meeting he had with the leadership of the Black Management Forum (BMF).

Before the BMF meeting he addressed around 200 businesspeople at a breakfast event held at Deloitte. And after our interview he has a meeting with senior Treasury staff. All before 12:00. His staff manages his diary with military precision.

Two minders -- his spokesperson and an aide -- join us in the boardroom and listen in on the interview, making copious notes.

There's no smalltalk and no icebreaker with the finance minister, the person on which international ratings agencies, big business and constitutionalists pin South Africa's economic fortunes. He initially talks about the importance of democratic institutions, but his easy tone changes when we breach the subject of the Guptas.

He rattles off the background to the pending court application, speaking in a clipped, measured voice. His hands are folded and remain that way for the majority of the interview.

"South Africans need to take note of the fact that for a significant period of time there was a mobilisation of certain sectors in the business community and the media directed at Treasury, in the interests of a very narrow group of people," Gordhan says.

This "narrow group of people" are the Guptas, who complained to Gordhan about the banks' decision to cease banking services to Oakbay. Gordhan earned the chagrin of the infamous Saxonwold family when he refused to help them, arguing he doesn't have the executive or legal authority to do so.

It however wasn't enough to pacify the Guptas, who regularly host the head of state at their Johannesburg compound, are the president's son, Duduzane's, business partners, and who, according to the Public Protector, use their proximity to powerful politicians to get their way.

"Despite repeated responses from us saying we don't have the power to intervene between bank and client, political pressure, the political narrative and basically underhanded methods were utilised to exert . . . what appeared to be . . . pressure (on him and Treasury).

It's fascinating to see how a simple court case, over what is a relatively simple matter, has become the subject of such foul play . . . and the extraordinary lengths that are gone to, to discredit individuals and institutions.Gordhan, on Tuesday's court proceedings between himself and the Gutpas' Oakbay Investments

"There have been a lot of false narratives created around this. We live in the age of fake news and highly orchestrated propaganda campaigns, but ultimately this is a matter for the courts, who will decide on the merits and finally adjudicate.

"It's fascinating to see how a simple court case, over what is a relatively simple matter, has become the subject of such foul play . . . and the extraordinary lengths that are gone to, to discredit individuals and institutions," Gordhan says.

Treasury, a department that prefers an anonymous, technocratic background role in governance, has recently gone on the offensive, fighting back at the slew of narratives portraying it as "anti-transformational", "a state within a state" and in the pockets of "white monopoly capital".

"It (the awareness campaign) was quite intentional," Gordhan confirms to HuffPost SA.

In the run-up to the tabling of the Budget in February, it laid out details of the budgeting process, and went on a social media charm offensive and media blitz, disproving conspiracy theorists and Gupta acolytes who allege Gordhan allocates money to departments in a shady way

South Africa is a democracy governed by laws. All of us are required to obey those laws . . . we have merely been doing our job. Good institutions do their job without fear of favour.Gordhan, on whether there is political risk in challenging President Jacob Zuma's friends, the Guptas

The Twitter handle @TreasuryRSA even tweeted inspirational early-morning messages.

Asked whether he believes there is political risk in challenging a family so cosy with Zuma, Gordhan replies: "South Africa is a democracy governed by laws. All of us are required to obey those laws . . . we have merely been doing our job. Good institutions do their job without fear or favour. If we are required to clarify certain matters in court we will do so. Hopefully we will be found to have done the right thing."

The integrity of Treasury remains at the top of Gordhan's list of priorities. He argues that well-functioning, legitimate institutions make democracies function and ensure that citizens take ownership of them: "If they are led in the right way they can be useful, if they're not led in the right way, their impact can be negative."

He reiterated his pre-Budget comments that Treasury and Sars are institutions that shouldn't be messed with. "Treasury should be allowed to do what the law requires it to do, what the national interest dictates and also what the governing party's policies –- within the framework of the law –- enjoins it to do," he says.

These institutions should be regarded as "sacrosanct".

"But we do get negative forces -– I'll leave that to your imagination -– who think it will be easier to get consent for certain things if they had less professional people . . . or, more pliant people . . . in those institutions. But really, that is short-term thinking. And it could cause damage to the country and the economy."

This is a key-institution, it must be run on a professional basis and in the public interest. It is important to educate the new leadership about their environment and what their mission in life is.Gordhan, on Sars and its leadership

Sars, besides Treasury, is an indispensable tool "for public good".

Gordhan has been in conflict with Sars commissioner Tom Moyane from the get-go, to such an extent that he has told Parliament information received from Sars is unreliable and that Moyane has requested Zuma's intervention in the protracted conflict.

This issue is personal for Gordhan, having played the pivotal role in transforming Sars into one of the most respected institutions of its kind in the world. But it has hit the skids: Sars has lost 55 senior executives in recent times, Moyane has closed down a number of specialist internal units and revenue is short R30 billion.

"This is a key-institution, it must be run on a professional basis and in the public interest. It is important to educate the new leadership (Zuma appointed Moyane in September 2014) about their environment and what their mission in life is. As long as they are there (at Sars) they must discharge their duties," he says.

"As the minister responsible for the revenue service I have to keep a careful eye on whether it is performing as it should. I also try to have meetings as frequently as possible to understand progress on the delivery mandate it has been given."

Gordhan has been under immense political pressure ever since his return to the finance portfolio. At one stage it got so bad that he made a public statement about the toll it was taking on his family and imploring South Africans to rally around Treasury.

But officials at Treasury -- to a man intensely loyal to "PG", as he is known -- say he was very calm amidst the storms raging in the build-up to the tabling of the budget, unperturbed and unruffled. At the Deloitte breakfast he spoke crisply, measured and off the cuff about the economic and institutional challenges facing Treasury and the country. He exuded the confidence of someone in control and convinced of his mission.

If his gambit to challenge the Guptas in court this week pays off, a lot of pressure will be released.

And he may find himself to be in his strongest position yet.