Ramaphosa Called to Answer Claims in S. African Graft Probe

(Bloomberg) -- South African President Cyril Ramaphosa has until June 21 to answer anti-graft ombudsman questions after being implicated in a probe into a donation his campaign received from a company linked to a bribes scandal. The rand fell.

Ramaphosa received notification on May 30 about the preliminary outcome of the investigation, which will be finalized once he has responded, Busisiwe Mkhwebane said in a letter to Mmusi Maimane, the leader of the main opposition Democratic Alliance, which requested the probe. She has yet to decide whether to agree to a request by the president to question Maimane and other witnesses.

Johannesburg’s Sunday Independent newspaper reported on May 9 that Mkhwebane had found that Ramaphosa violated the constitution and may have been party to money laundering when his campaign to win control of the ruling party accepted a donation from services company Bosasa.

The company had business dealings with Ramaphosa’s son and was implicated during a judicial probe of paying bribes to some cabinet ministers and senior government officials to win state contracts.

Rand Slumps

An already bad day for the rand got even worse following the release of Mkhwebane’s letter. The currency snapped its three-day winning streak, dropping as much as 1.2% against the dollar.

“It could be a source of uncertainty for the market and could also potentially slow down or at least distract President Ramaphosa from focusing on the implementation of economic reforms,” said Piotr Matys, a currency strategist at Rabobank in London.

Ramaphosa last year denied receiving money from Bosasa but backtracked a few days later, telling lawmakers he was unaware of the 500,000 rand ($33,832) payment, which would be returned. South Africa’s Presidency said Ramaphosa will fully co-operate with the investigation to ensure the “matter is speedily brought to conclusion.”

Credibility Crisis

“This is an embarrassing situation for Ramaphosa,” said Melanie Verwoerd, an independent political analyst. “The fact that the Public Protector’s deadline is one day after the president is due to deliver his state-of-the-nation address to Parliament puts additional political pressure on him.”

An adverse finding by the ombudsman would be a blow to the image of Ramaphosa, who has pledged to clean up government after his predecessor Jacob Zuma’s scandal-tainted nine-year presidency. It’s unlikely to put his leadership at risk.

“I think if there is going to be any negative finding it is going to be of a technical nature,” Lawson Naidoo, executive secretary of the Council for the Advancement of the South African Constitution, said by phone. “From what is in the public domain, I don’t think it is a major issue of any sort.”

The Public Protector’s office has faced a credibility crisis since Mkhwebane succeeded Thuli Madonsela in 2016. The High Court has accused her of bias, almost a third of the reports she’s delivered are facing legal challenges and civil-rights groups say she’s brought the office into disrepute.

Political Spats

Mkhwebane has also been accused of injecting herself into political spats between feuding ruling-party factions, targeting officials loyal to Ramaphosa while failing to investigate those allied to Zuma.

Mkhwebane, a lawyer and former analyst at the state security agency, has rejected the criticism, saying it is partly directed at undermining her investigations. Under the constitution, the Public Protector gets a non-renewable seven-year term and can only be removed from office if the National Assembly finds -- through a two-thirds majority vote -- that she is guilty of misconduct, incapacity or incompetence.

©2019 Bloomberg L.P.