Public Protector Busisiwe Mkhwebane is one step closer to facing prosecution for perjury over her report on the Reserve Bank’s bailout of Bankorp, after her representations motivating to have the charges dropped were unsuccessful. 

The National Prosecuting Authority (NPA) said on Tuesday that it now wants to proceed with the case against her. 

The matter follows a Constitutional Court judgment in 2019 that found that Mkhwebane had acted in bad faith and put forward a "number of falsehoods" in the Absa/Bankorp review case.

In June 2017, Mkhwebane released the Bankorp-CIEX report. Her findings called for Absa, which took over Bankorp in 1992, to repay R1.125-billion for a lifeboat provided by the Reserve Bank during the apartheid era. She had called the bailout "an illegal gift". Both the Reserve Bank and Absa had asked the courts to review the report and set it aside.

Accountability Now, which had initially laid criminal charges of perjury and defeating the ends of justice against Mkhwebane, welcomed movement in the case against the Public Protector, saying it was "long overdue".

"It is sad that this matter has taken so long, but we are pleased that the decision to prosecute has finally been taken," said the organisation's director, Advocate Paul Hoffman.

In December 2020, Mkhwebane became the first Public Protector to be criminally charged, and faced three counts of perjury relating to the review case.

Following her first court appearance in January 2021, Mkhwebane made representations as to why she should not be prosecuted. In June of the same year, one perjury charge was withdrawn.

According to the NPA, Mkhwebane appeared in the Pretoria Magistrate's Court on Monday.

NPA spokesperson Lumka Mahanjana told Fin24 that the matter was postponed for Mkhwebane's legal team to consider the National Director of Public Prosecutions’ (NDPP’s) reply to the previously filed representations, and "to further consider a possible review application".

Mahanjana confirmed that Mkhwebane's representations on why the remaining two perjury charges should be withdrawn were unsuccessful.

Flawed investigation

Bankorp received financial assistance from the SA Reserve Bank between 1985 and 1995 as it was about to collapse due to mounting bad debts, according to Absa. 

Absa acquired Bankorp on 1 April 1992 while the Reserve Bank's assistance was still continuing.

The bank stated Bankorp's collapse would have resulted in depositors losing their money. It further stated that when Absa acquired Bankorp in 1992, the assistance programme was already in place.

"The debt write-offs that would result from the SA Reserve Bank's intervention were taken into account in determining the price Absa would pay for Bankorp. This price was set at R1.23-billion and Absa paid it in full. This is why Absa cannot pay for the same thing twice," the bank said in 2017 as it explained its position in the matter.

The Constitutional Court ruled that Mkhwebane’s "entire model of investigation was flawed". It found that she failed to engage with the parties directly affected by her new remedial action before she published her final report, and that her explanation for why she discussed the vulnerability of the Reserve Bank with the State Security Agency was "unintelligible".

The majority judgment also ruled Mkhwebane failed to explain why she did not disclose any of her meetings with former President Jacob Zuma in her 2017 report.

She also did not produce transcripts of her meetings with the presidency or the State Security Agency.

Mkhwebane, who was appointed in  2016, has faced a number of legal challenges against her conduct during her term on office, including impeachment brought by a motion spearheaded by the DA in December 2019.

Hoffman said Accountability Now is calling for an expedited hearing of the perjury case, before the expiry of her seven-year term, which comes to an end in 2023.

Mkhwebane has already suffered a number of legal defeats during her time in office and the Constitutional Court, upheld the North Gauteng High Court in Pretoria's order in February 2018, for her to be personally liable for 15% of the SA Reserve Bank’s legal fees in the case.