SARB Governor evasive on Phala-Phala - DA to proceed to Court

30 August 2023

The Governor of the South African Reserve Bank (SARB), Lesetja Kganyago, today briefed parliament on the SARB investigation into allegations that President Ramaphosa contravened Exchange Control Regulations by holding US dollars at his farm for a period exceeding legislated limits.

The briefing followed an obtuse media release by SARB on 18 August, wherein the SARB stated that the President did not violate any exchange control regulations but refused to disclose their full report on the matter.

Despite the DA's efforts to obtain the report — which included correspondence with the Governor himself and filing a Promotion of Access to Information Act (PAIA) application — the SARB has remained steadfast in its unwillingness to disclose the document or sufficient information to ensure that the integrity of the SARB has not been compromised.

It is therefore that, during today’s meeting, I presented a sequence of questions to Governor Kganyago. These questions included:

1. Section 33 of the Reserve Bank Act prohibits directors, officers, and employees from the Bank from disclosing information. Not the Minister. Was the report made available to (any) Minister or the President himself?

2. Mr Hazim left the money as a security deposit. Where is the contract and why was cash taken and not a bank guarantee, and who carried the risk of the dollars?

3. Did the SARB consider how an entitlement can be contingent as envisaged in regulation 6(5), and did the SARB consider the duty in regulation 6(5) against delaying a contingency from eventuating?

4. Did the SARB consider the impact its reasoning could have on money laundering and how persons can avoid declaring foreign currency by simply stipulating conditions in a contract?

5. Has any action been taken previously against any individual or entity even though a transaction has not been perfected.

Governor Kganyago's responses were evasive, incomplete and unconvincing.

The Governor did however admit that the SARB had not seen any contract, other than an invoice, that outlined the conditions of the transaction in question, which raises doubts about the integrity of the investigation. Moreover, he offered no insight into any precedents set by previous investigations.

South Africa's financial stability hinges on the transparency and integrity of its Central Bank. It is an institution that cannot be left to operate in a shroud of ambiguity. Given that our attempts to extract transparency through other channels have been futile, the DA will now turn to the court to review the SARB decision.

The DA will not let this matter rest. South Africans have a right to know what actually happened at Phala-Phala and that includes knowing whether the President broke any financial law he is entrusted to uphold.

Issued by Dion George, DA Shadow Minister of Finance, 30 August 2023