Outgoing Finance Minister Pravin Gordhan
Photo by: Duane Daws
Sacked Finance Minister Pravin Gordhan on Friday said it’s up to his successor Malusi Gigaba to take decisions regarding Gupta-linked Vardospan’s bid to take over Habib Bank.
Gordhan was speaking at a briefing at Treasury, following his axing on Friday morning.
He responded to a question relating to North Gauteng High Court Judge Ronel Tolmay’s decision to throw out an urgent application by Vardospan to attain a majority shareholding in Habib Bank.
“The banking regulator has reached a certain point in decision-making. It’s up to my successor to apply his mind on the issue,” he said.
Gordhan explained the role of banks. “Banks are important institutions - sometimes we forget the purpose of (a) bank (is) to collect deposits from customers and then pay out cash as deposits,” he said.
Banks should be able to yield profits for shareholders. The depositor also wants to earn interest and be assured that money will be repaid when it is required, he explained.
“2008/09 showed us important lessons for banks." If banks do not have substantial shareholders who put in the cash needed for the right liquidity and capital to be held, they will find themselves in trouble, said Gordhan. This was seen with the Royal Bank of Scotland and Lehman Brothers.
He added that the banking sector has still not worked out its difficulties from the global financial crisis.
Hamza Farooqui, who heads Vardospan, told journalists after the ruling that regardless of who the finance minister is, he would continue his fight to start a bank. “The merits are important – I am very confident that I am able to build a banking institution in South Africa and I am confident in some point in time, I will have the opportunity.”
He added: “I am an entrepreneur and I will not give up. The fight continues.”
During his address, Gordhan highlighted that Treasury has faced horrific attacks in recent months. Speaking about his own application against Gupta-owned Oakbay, he said that getting an order for declaratory relief was important to have clarity for a firm policy basis. In this case, a decision by the court of law is necessary to avoid "haggling" in the future, he said. "We will see what happens as far as judgment is concerned. That clarity is crucial."
Axed Deputy Finance Minister Mcebisi Jonas added that the State of Capture report by former public protector Thuli Madonsela was the pinnacle, consolidating a picture of state institutions becoming “increasingly vulnerable”.
“You don’t need to be a genius to see a trend in the country,” he said. “What you have in front of you, history is unfolding. Democracy in a sense is being undermined, ” he added.