Costs order: Public Protector Busisiwe Mkhwebane says it is disturbing that the Reserve Bank is seeking punitive costs against her. Picture: SUNDAY TIMES
Costs order: Public Protector Busisiwe Mkhwebane says it is disturbing that the Reserve Bank is seeking punitive costs against her. Picture: SUNDAY TIMES

The public protector says she is "disturbed and saddened" that the Reserve Bank is seeking a costs order against her in her personal capacity for her report on Absa and Bankorp.

"I am so disturbed and saddened that an organ of state like the Reserve Bank can ask for that when the Constitution is very clear in terms of section 181 that organs of state should be supporting the public protector in the performance of her duties," Busisiwe Mkhwebane said on Monday. "If you seek for punitive costs, it means I must not do my work without fear or favour," she said.

On Tuesday, the High Court in Pretoria begins hearing argument from the Reserve Bank, Absa and the Treasury on why Mkhwebane’s finding that Absa benefited unduly from an apartheid-era bail-out of Bankorp is incorrect and should be set aside. She also wanted Absa to repay R1.125bn.

The Reserve Bank claims she was not impartial, as required by section 181, and is seeking a declaratory order that she abused her office.

For example, Mkhwebane had not disclosed in her report that she had held two meetings with the Presidency to discuss her remedial action before issuing her findings. "She is required to be a check on the misuse of state power; not a vehicle for it. This court, ought, accordingly, to declare that she has abused her office during this investigation," said the Reserve Bank’s general counsel, Johannes de Jager.

The Treasury, meanwhile, is seeking to have the entire report set aside, not only the corrective action relating to the recovery of the Bankorp "lifeboat loan" — a form of relief that Mkhwebane describes in papers as being "too wide".

Finance Minister Malusi Gigaba said in an earlier affidavit that the public protector had failed to conduct an investigation in line with her constitutional mandate, reaching conclusions in her Absa-Bankorp report that were "manifestly lacking in logic" and did not support the evidence before her.

Mkhwebane’s retrospective justification for her report, contained in her answering affidavit, was "based on a number of fundamental misunderstandings of the nature of the financial assistance given to Bankorp", De Jager said.

Mkhwebane admitted in papers she had not interrogated the use to which the proceeds of the Bankorp lifeboat were put.

In August, the high court set aside the public protector’s directive, in the same report, that the Reserve Bank’s constitutional mandate be changed.

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