11/09/2017 15:51 SAST | Updated 11/09/2017 20:12 SAST

Ferial Haffajee: Malusi Gigaba poised to make a big call

The Financial Intelligence Centre is one of our country's most important bulwarks against crime. And Malusi Gigaba will make the next appointment.

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Finance Minister Malusi Gigaba. He will soon appoint someone to one of the most important bureaucratic positions in government - that of director of the Financial Intelligence Centre.

Finance Minister Malusi Gigaba has advertised the job for one of the country's most essential anti-corruption czars -- and put a lightning-fast two-week deadline on applications for the post.

Gigaba is looking for a director of the Financial Intelligence Centre (FIC), which oversees the matrix of anti-money-laundering systems South Africa has put in place.

The FIC analyses reports and data on suspicious money movements given to it by the country's banks.

In a global economy, this centre is vital to South Africa's sovereignty and good governance. It can pass information on to crime-fighting authorities; it ensures that South Africa does not become a hub for dirty money and it monitors financial outflows to ensure the fiscus gets its fair share of taxes.

Incumbent Murray Michell is unlikely to have his term renewed, say Treasury insiders, some of whom were taken by surprise by the advertisement in the Sunday papers. Applications for the role close on 25 September.

(The FIC) ensures that South Africa does not become a hub for dirty money.

The FIC is not well-loved by the politically influential Gupta family as its reports and analyses were used by former finance minister Pravin Gordhan in his application to court to stop the family from forcing him to put political pressure on the banks to re-open their accounts. Gordhan added an FIC analysis to his court papers, which flagged suspicious and unusual transactions by the family and its companies to the value of R6.8 billion.

The FIC also fined the Bank of Baroda R11 million in relation to suspicious transactions associated with the Gupta family's accounts kept with that Indian bank. Baroda bank has also given the family notice of its intention to end its banking relationship with them.

The Pretoria High Court last week heard an urgent application against Indian-based Bank of Baroda by 20 Gupta-owned companies including VR Laser Services, Oakbay Investments, Optimum coal mine, Shiva Uranium and Tegeta Exploration that their bank accounts should be kept open. Judgement was reserved.

Alarmed by the short deadline on the job advertisement, a Treasury staffer who spoke off the record said: "This could be the capture of the FIC." A malleable incumbent as FIC director will neuter the entire Financial Intellence Centre Act (FICA), say specialists. The FICA laws are politically unpopular and have been updated this year to bring them into line with more muscular global anti-corruption laws.

"This could be the capture of the FIC."

The new boosted version of the laws make it incumbent on the banks to notify the authority of a wider range of suspicious transactions and it puts an additional red flag on the accounts of politically influential or politically exposed persons. The security cluster of the Cabinet wants to have greater influence over the FIC and there are fears that it may try to deploy a securocrat into the role.

President Jacob Zuma stalled passing the amended FIC law after being lobbied by the media magnate and black business lobbyist Mzwanele Manyi. Zuma passed the laws in April only after being threatened with an approach to the Constitutional Court by the Council for the Advancement of the South African Constitution to force his hand.

A second source at the Treasury said Gigaba was only being careful by advertising early. Michell's term ends at the end of December and it's a strategic post, which needs to be approved by Cabinet, although Gigaba is the appointing minister. This process can take time, so the minister has put a short deadline on the application process, said the official.