South Africa’s Gordhan Takes Legal Advice on Police Letter

  • Gordhan gets ‘correspondence’ from police unit, office says
  • Daily Maverick reported Gordhan summonsed to report to Hawks

Rand Plunges After Gordhan Summoned by Police

South African Finance Minister Pravin Gordhan received “correspondence” from a special police unit and is getting legal advice on the matter, National Treasury spokeswoman Phumza Macanda said.

QuickTake South Africa

Gordhan is considering the letter he received on Monday from the police unit known as the Hawks, Macanda said by text message on Tuesday. The minister is “reserving comment at this stage,” she said.

Johannesburg-based Daily Maverick reported that the Hawks asked Gordhan and four other former tax agency officials to report to their office on Thursday. Gordhan was informed he would receive a “warning statement” given to accused persons before they are charged with an offense and to advise them of their rights, the news website reported, without saying where it got the information.

The rand fell by the most in a month against the dollar on Tuesday, closing at 14.0019, its weakest level since July 28. The currency strengthened on Wednesday, gaining 0.5 percent to 13.9334 by 7:40 a.m. in Johannesburg. Yields on rand-denominated bonds due in December 2026 climb 29 basis points to 8.81 percent, the highest since July 22.

Hawks spokesman Hangwani Mulaudzi declined to comment. Presidency spokesman Bongani Ngqulunga didn’t immediately respond to a phone call and text message seeking comment.

The Sunday Times newspaper reported in May that Gordhan may face dismissal and arrest on espionage charges for setting up the South African Revenue Service’s National Research Group to spy on politicians including President Jacob Zuma, 74. Gordhan denied any wrongdoing and said he was being harassed by people intent on manipulating the justice system for political gain. The Presidency denied those reports that Gordhan would be arrested or replaced.

Gordhan, 67, was reappointed as finance minister in December after Zuma roiled markets by firing Nhlanhla Nene from the position and replacing him with a little-known lawmaker. He had first served as finance minister from 2009 to 2014 and headed the nation’s tax agency before that.

“The market is very jittery about if there’s going to be a reshuffle in cabinet,” Wichard Cilliers, a trader at Treasuryone (Pty) Ltd. in Pretoria, said by phone. “Mr Gordhan is a thorn in his flesh, I think he’s just going to try and get rid of him anyway he can.”

Zuma and Gordhan have been at loggerheads over the management of South African Airways, the loss-making national airline, and Gordhan’s demands that Zuma fire the nation’s tax chief, Tom Moyane, for insubordination.

The government is struggling to retain South Africa’s investment-grade credit rating and Gordhan has met with business and labor leaders and investors to seek measures to boost confidence in an economy that the central bank projects won’t expand this year.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE