South African Finance Minister Pravin Gordhan will be prosecuted for fraud, officials said on Tuesday, in a move that sent the rand tumbling over concerns about political rivalry and the country’s fragile economy. Gordhan, 67, was appointed only late last year to calm panicked investors after President Jacob Zuma sacked two finance ministers within four days. Since then, Gordhan has regularly clashed with Zuma loyalists after vowing to battle poor governance and graft in a government that has been engulfed by regular corruption scandals.
Shaun Abrahams, head of the National Prosecuting Authority (NPA), told reporters that Gordhan would be prosecuted over alleged misconduct when he was previously chief of the South African Revenue Service (SARS) tax collection department. Gordhan and two others “must be prosecuted and arraigned on the following crimes: count one, fraud,” Abrahams said.
Abrahams repeatedly denied that the NPA was being politically influenced, and he lashed out at criticism that it was not independent. “The days of disrespecting decisions of the National Prosecuting Authority are over,” he said vehemently. “The days of non-accountability and not holding senior government officials accountable are over.”
The NPA said the case focused on allegations that Gordhan illegally authorised an early retirement package for a senior colleague at SARS, which Gordhan headed between 1999 and 2009. Gordhan, who also served as finance minister from 2009 to 2014, is widely seen as being engaged in a fierce battle within the ruling African National Congress (ANC) party over control of the treasury.
Zuma has publicly said he backs Gordhan, who has also been targeted by investigators over a so-called “rogue unit” set up to probe top politicians when he headed the tax service. Gordhan, a respected technocrat, has often clashed with Zuma and senior ministers over alleged excessive spending, particularly at cash-bleeding state-run entities such as South African Airways.
South Africa’s economy has been struggling with record unemployment, drought and political scandals surrounding Zuma. Growth is set to be flat this year, and the country risks a damaging credit ratings downgrade to junk status. Abrahams on Tuesday said he believed that Zuma, who is
currently visiting Kenya, knew about the prosecution.
“I informed the (justice) minister of the decision that had been made, because this matter affects a sitting cabinet minister… I deemed it prudent for the minister to inform the president,” he said. The rand dropped as much as 3.4 per cent against the dollar shortly after the announcement.