South African prosecutors withdrew fraud charges against finance minister Pravin Gordhan, saying he didn’t intend to act unlawfully.
The announcement on Monday by National Prosecuting Authority head Shaun Abrahams marked a dramatic turnaround in the legal pursuit against Gordhan, who was under investigation over the early retirement of a former colleague at the national tax agency that resulted in R1,1m of allegedly wasteful expenditure. Gordhan was scheduled to appear in court on Wednesday.
Gordhan and two former colleagues “did not have the requisite intention to act unlawfully”, Abrahams told reporters in Pretoria. “I have decided to overrule the intention to prosecute. I have directed the summonses to be withdrawn with immediate effect.”
Gordhan, 67, has been a key driver of a campaign to maintain South Africa’s investment-grade credit rating, which is up for review over the next two months. He called the allegations a political stitch-up, and he’s clashed with President Jacob Zuma over the affordability of nuclear power plants the president wants to build, and the management of state companies and the national tax agency.
The rand advanced as much as 1,8% against the dollar, to the strongest since 4 October, leading gains among 31 major and emerging-market currencies tracked by Bloomberg. Against the euro, South Africa’s currency rallied as much as 2,1% to the highest since 16 August.
“This is new chapter in the war between Zuma and Gordhan,” said Theo Venter, a political analyst at North West University in Potchefstroom, west of Johannesburg. “The obvious strategy to get Gordhan out of the cabinet failed. It is going to be very, very hard to remove Gordhan now.”
While Monday’s decision appeared to strengthen Gordhan’s position, prosecutors are still considering whether to charge him in connection with allegations that he oversaw the establishment of an illicit investigative unit during his tenure as head of the national tax agency.
Zuma appointed Gordhan as finance minister in December under pressure from ruling party and business leaders, after his decision to give the post to little-known lawmaker Des van Rooyen sparked a sell-off in the rand and nation’s bonds. — (c) 2016 Bloomberg LP
