EDITORIAL: When a loss may be a win
Neither Pravin Gordhan nor the Guptas emerges from the judgment unscathed
Sometimes what seems like a defeat in court can actually be a victory. So it is with the high court’s dismissal of former finance minister Pravin Gordhan’s application for a declaratory order to prevent him interfering in the Guptas’ dispute with the banks.
In effect, three judges declined to grant the declaratory order because the law on the subject is so clear that no order was needed. That’s the bottom line that emerges from the text of the judgment.
Amid all the litigious to-ing and fro-ing between the parties and the various interlocutory applications and counter-applications, the text of the judgment returns frequently to what it calls the "succinct legal issue" — whether a declaratory order is needed to tell the finance minister that he has no power to intervene in the contractual relationship between banks and their clients.
The answer from the court was that there was absolutely no uncertainty about this.
Neither the finance minister nor — importantly — any other member of the executive is entitled to tell banks who they can or can’t bank. "There is no statute that empowers a member of the national executive such as the minister to intervene in a private bank-client dispute. Neither does the Constitution confer such powers," says the judgment.
Equally, there is legal precedent in SA that makes it clear that banks were perfectly within their rights to close the Gupta bank accounts.
All of which means, as the court saw it, that there wouldn’t be much use in a declaratory order, which could in any event raise questions about whether the judiciary was intervening in executive decision-making — something SA’s courts have been particularly careful to avoid of late, given how many decisions they are being asked to make on matters that ideally ought to be resolved through the political process.
It’s not that the judgment goes easy on the former finance minister, suggesting as it does that he was pushing it even to apply to court for a declaratory order, given that he had refused to interfere anyway despite pressure from the Guptas and that the Gupta group of companies had conceded the point. Neither Gordhan nor the Guptas emerges from the judgment unscathed.
But, this case was in a sense never really about pure legalities. One objective for Gordhan, who had the support of SA’s banking regulators and of SA’s big banks, was to flush out into the open just why it was that the banks had to close the accounts of the Gupta group. The court case enabled at least some knowledge of the 72 suspicious transaction reports that lay behind the banks’ decision.
This was important, given the Guptas’ protestations of innocence. And it served to emphasise the point as another salutary reminder to those involved in state capture and corruption more generally, as well as to money launderers and others engaged in illicit flows of cash, that the banks and the Financial Intelligence Centre would notice and that this kind of activity could leave the perpetrators unbanked — as the Guptas now pretty much are.
The more fundamental outcome of the case is simply that the issue has now been thoroughly aired in court, and the message is that no finance minister can think he or she is entitled to tell banks who they can bank, nor can any individual or company try to strong-arm any minister into intervening with banks on their behalf. That means too that — as the court suggests — Mineral Resources Minister Mosebenzi Zwane was totally out of order when he set up an interministerial committee to intervene in the dispute.
Is it too much to hope that the courts will rule Zwane out too in his efforts to undermine the mining industry?