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Report: Party chiefs back South African finance minister amid roadshow drama


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Report: Party chiefs back South African finance minister amid roadshow drama

Senior members of South Africa's ruling party have told President Jacob Zuma that they oppose his plans to fire finance minister Pravin Gordhan, amid speculation about Gordhan's future that has weakened the rand and raised fears of a sovereign credit rating downgrade.

Zuma told the African National Congress leaders in a meeting Monday that he wanted to dismiss Gordhan for plotting to undermine him during an investor roadshow in the U.K. and the U.S., Bloomberg reported March 29. However, three of the ANC's top six officials, including Deputy President Cyril Ramaphosa, told Zuma they opposed his plan, Bloomberg reported, citing "a person with knowledge of the matter."

The rand tumbled Monday on reports that Zuma had ordered Gordhan to return from London, where they and a delegation of South African businesspeople were meeting potential investors. A second leg of the trip, to the United States, to be led by Gordhan's deputy Mcebisi Jonas, was cancelled. The recall and cancellation were confirmed in a statement on the national treasury's website although the ministry did not offer any reasons.

All three of the main credit rating agencies have put South Africa on a negative outlook and lowered its long-term local-currency rating to a notch above junk status.

In another development, Gordhan attended a hearing in the Pretoria High Court on March 28 to support his application for a declaratory order that he cannot interfere in relationships between banks and their clients, the Rand Daily Mail reported March 29. He did not testify.

Gordhan is attempting to resist an effort by the influential Gupta family demanding he intervene in their dispute with the country's commercial banks. South Africa's four biggest lenders closed Gupta-owned companies' accounts in 2016 over "suspicious transactions" amid controversy over their links to Zuma, who later tasked a ministerial committee including Gordhan to investigate the closures.

The court ruled March 28 that details of the transactions made by Gupta-owned companies were irrelevant to the issue of whether the finance minister can intervene in the business between banks and their clients.

The 72 suspicious transactions worth 6.4 billion South African rand were detailed in a Financial Intelligence Centre certificate, which the court has removed from the case, according to the Rand Daily Mail report.

One of the banks, Standard Bank Ltd., filed an affidavit in the High Court in December 2016 asking for protection from interference by government.

The court, however, declined an application by Zuma to join the case as an interested party, saying he had not followed the right procedure.

The court has not yet made a decision regarding Gordhan's application for the declaratory order.