By Lehlohonolo Lehana.
The South African Reserve Bank (SARB) has cleared President Cyril Ramaphosa of any wrongdoing in its investigation into the millions of undisclosed foreign currency stolen from his Phala Phala farm in 2020.
In a statement, the central bank says, Ramaphosa was found to have not contravened the Exchange Control Regulations.
“On the facts available to it, the SARB finds that there was no perfected transation and thus the SARB cannot conclude that there was no contravention of the Exchange Control Regulations… by Ntaba Nyoni Estates CC or that that matter by the President.”
Ramaphosa’s Ntaba Nyoni Estate, that owns the Phala Phala game farm, was not “legally entitled” to the $580 000 it received from Sudanese businessman Hazim Mustafa for 20 buffalo.
But because the transaction was not “perfected” – Mustafa never received delivery of the buffalo – there was no legal obligation on Ramaphosa or Ntaba Nyoni to have declared the foreign currency under exchange control regulations.
The SARB took almost a year to complete its investigation, consisting of 15 affidavits, dozens of documents running into hundreds of pages and interviewing relevant individuals.
“The central bank said it would not release the full “private internal” Phala Phala report, but because the matter had “significant public importance” it would release the findings.,” the Reserve Bank’s statement reads.
In June, Acting Public Protector Kholeka Gcaleka, whose office holds politicans to account, said Ramaphosa did not violate the ethics code for members of South Africa’s executive over the incident, which happened in 2020 but was only revealed publicly last year.
The scandal was seen as the biggest challenge to Ramaphosa’s reputation and his leadership of Africa’s most developed economy. There is still an ongoing criminal investigation into the incident.
Ramaphosa said $580,000 in cash was stolen. Gcaleka said it was not part of her investigation to confirm how much money was involved and didn’t give a figure.
Ramaphosa, 70, was accused of not reporting the theft properly to police in an attempt to cover up the existence of the large sum of cash hidden in furniture at his farm. He said he reported it to the head of his security detail, which is part of the South African Police Services.
In clearing him in her final report on the scandal, Gcaleka accepted that Ramaphosa had reported the crime to the head of his personal protection unit and the contention that he had acted improperly was “not supported.”
Gcaleka also said there was no evidence that Ramaphosa was guilty of a conflict of interest regarding any income from the business operations of his Phala Phala game farm in the northern Limpopo province.
The investigation of Ramaphosa was prompted by a complaint made to the Public Protector’s office by the opposition African Transformation Movement Party.
The incident came to light last June when the former head of South Africa’s intelligence service, Arthur Fraser, opened a case with police accusing Ramaphosa of hiding as much as $4 million at his farm before it was stolen. Fraser accused the president of money laundering and breaching tax and foreign currency control laws, and attempting to cover up the theft of the cash in an attempt to hide its existence.
Ramaphosa denied any wrongdoing and also disputed the amount of money Fraser claimed was stolen.
The scandal led to opposition parties calling for Ramaphosa’s resignation but they failed in an attempt to start impeachment proceedings against him as his ANC party maintains a majority in the 400-member Parliament.
In December, a report by a parliamentary panel looking into the matter found that Ramaphosa may have broken anti-corruption laws.
Reactions
Democratic Alliance (DA) spokesperson on finance Dion George said the SARB’s finding hinged on the absence of a “perfected transaction”, which means the legal prerequisites for the transaction to be completed were not met.
“Specifically, the conditions for a perfected transaction were unfulfilled due to the non-delivery of a buffalo to the infamous businessman Hazim Mustafa.
“This led to the Reserve Bank’s conclusion that there was no legal obligation under the exchange control regulations of 1961 to declare the foreign currency.
“However, the suspicious circumstance of the money being stuffed into the president’s couch, and the possibility that cash was held beyond a legislated limit, seem to have been beyond the scope of the Reserve Bank’s investigation.
“The narrow focus of its investigation also raises concerns about its thoroughness and whether any political considerations arose.”
George said the SARB’s integrity and independence as the regulator of currency within and across South African borders were paramount.
The Economic Freedom Fighters (EFF) rejected the SARB’s finding “with contempt”.
“In their pathetic and poor attempt to cleanse Ramaphosa of the Phala Phala crimes, the SARB has unwittingly confirmed our suspicions that there was never a transaction or intention to have a legal transaction.
“Instead, the intention was to launder money through Phala Phala, as we have consistently maintained that Ramaphosa uses his farming business as a front for money laundering,” read the party’s statement.
It pointed out it was common cause that the foreign currency entered South Africa.
“SARB is duty-bound to register the flow of funds and police movements of currency within South Africa’s borders.
“The mandate of the SARB is not to police whether transactions were concluded or not, or whether goods were delivered or not after a purchase.
Freedom Front (FF) Plus leader Pieter Groenewald had a similar question, saying it could now be rightly asked how the foreign currency ended up in South Africa and on the farm if there was not any proof a transaction took place.
He added the SARB’s finding showed the FF Plus was correct in insisting on a parliamentary ad hoc committee to investigate the matter.
“This wasn’t done because the ANC misused its majoritarian power to prevent an investigation.”
Groenewald said the SARB confirmed the independent panel’s finding there were several aspects around the issue that Ramaphosa had to answer to.
The African National Congress (ANC) has welcomed findings by the Reserve Bank following investigations into Ramaphosa’s Phala Phala farm saga.
The party said that the central bank’s findings that the president did not violate exchange control regulations was unambiguous and definitive.
In a short statement, the ruling party further expressed satisfaction with the outcomes of the investigation.
The ANC said it hoped the reserve bank’s conclusion would bring an end to what they’ve called baseless accusations levelled against the president.