Mkhwebane ditched ABSA to meet BLF instead, court hears


Pretoria – Instead of granting ABSA – an implicated party in one of her reports – its request for a meeting, the Public Protector chose to meet with other parties, including ABSA’s adversary Black First Land First (BLF), before finalising the Bankorp-CIEX report, a court heard on Tuesday.

The Bankorp-CIEX matter is being heard at the North Gauteng High Court before a full bench of judges including Judge Cynthia Pretorius, Judge Nomonde Mngqibisa-Thusi and Judge Dawie Fourie.

It relates to a report Public Protector Busisiwe Mkhwebane released in June, where her findings called for ABSA to repay R1.125bn for a lifeboat provided to Bankorp by the South African Reserve Bank (SARB) during the apartheid era. Both the SARB and ABSA filed court applications to have the court review the report and set it aside.

At the hearing on Tuesday, ABSA’s legal counsel Gilbert Marcus SC argued that Mkhwebane failed to conduct a fair and unbiased investigation as there was a “profound misunderstanding” of the requirements for procedural fairness.

In particular, Mkhwebane did not allow ABSA to address the remedial action before releasing the final report. “In the interests of the decision maker as well, it assists the decision maker to make accurate and correct findings using assistance or input from affected parties,” said Marcus.

“The Public Protector, like all Chapter Nine institutions, is required to be both independent and impartial and required to act without fear, favour or prejudice. We are constrained to submit that the Public Protector breached requirements of independence, and fairness, impartiality,” he said.

Lack of independence

Marcus pointed out that Mkhwebane instead met with the Presidency, the State Security Agency (SSA) and Black First Land First (BLF) before finalising the report. “They [the meetings] took place post the provisional report and before the publication of the final report.”

Mkhwebane also failed to provide an explanation for her second meeting with the Presidency on June 4. “She justifies meeting with the Presidency and SSA on the basis that (they) were implicated in her finding, because they imposed certain obligations on those institutions.

“The most serious implication is the one against ABSA and ABSA had specifically requested a meeting before the finalisation of the report,” he said.

Based on this, Mkhwebane’s conduct was clearly unfair as she did not afford ABSA, which was “most affected”, a similar opportunity to address the remedial action.

“The Public Protector did not provide ABSA, as an implicated party, the same privy (sic) it did for the Presidency and indeed to the BLF.”

Mkhwebane however revealed that her discussion in the meeting with the Presidency was to discuss the remedial action.

“She tells us her purpose was to discuss the remedial action because she became concerned that the draft remedial action for the President to set up a judicial commission may face similar difficulties as that currently faced in the State of Capture report.

“This is a remarkable attempt at justification. We submit it demonstrates a serious lack of understanding of what it means to be independent.”

Marcus questioned this as the Public Protector and the President were at “loggerheads” over the question of remedial action. Based on the State of Capture report, the President had challenged the remedial action, while the Public Protector defended it.

“She chose not to independently stand her ground, not to independently adopt a stance she felt was correct in law. She chose instead to negotiate with (an) adversary in litigation to avoid further litigation if the President took issue with her remedial action.”

To ensure independence, there should not have been a negotiation of the remedial action at all.

The SARB’s counsel Advocate Kate Hofmeyr also argued that the Public Protector had breached her constitutional duty to remain independent and impartial and did not follow procedural fairness. “That alone is a review ground to set aside the report,” she said. “She lacked independence in this investigation.”

Hofmeyr referred to the meetings with the Presidency and SSA, in the period between the preliminary report and the final report. “She met with the Presidency in conditions where she did not meet with other applicants.

“This investigation was conducted in a manner that abused the Public Protector’s office.” The SARB is seeking a declaratory order indicating that the Public Protector abused her powers. 

BLF a ‘sharp’ adversary

Marcus also discussed the Public Protector’s consultation with BLF, which was “sharply adverse” to ABSA. “Its stance was for ABSA to repay alleged debt.”

The BLF had also led protest marches against ABSA following the leak of a the provisional report.

“The BLF had instituted litigation among others including ABSA and the Reserve Bank concerning government’s alleged failure to implement the CIEX document.

“What transpires is that the Public Protector was prepared to engage with an adversary to ABSA but not with ABSA itself.”

Marcus added that one of the purposes of the meeting with the BLF was to discuss the progress towards finalising the CIEX investigation.

“A reasonable person objectively looking at what the Public Protector did, as opposed to what was required, gives rise to reasonable apprehension of bias,” said Marcus.

During his delivery, Marcus also raised issue with the factual inaccuracies of the report such as those related to the repayment of the debt by ABSA. He also took aim at Mkhwebane for going back on her remedial action by referring to it as a mere recommendation, as she did when she ordered for the SARB’s constitutional mandate to be changed.

Advocate Carol Steinberg spoke on the unlawfulness of the remedial action, particularly how she indirectly tried to use the Special Investigations Unit (SIU) as a middleman to approach the President. “It is unlawful to do indirectly what you cannot do directly.”

Further, the two bodies (Public Protector and SIU) refer matters to each other for independent consideration. There is no suggestion that they can tell each other what to do and the one does not act under dictation of the other, Steinberg explained. “If it does, the decision that flows from it will be unlawful,” she emphasised.

“Even if the Public Protector could instruct the SIU, which she can’t, they could not lawfully do what she instructs them to do.”

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