Treasury under investors’ watchful eye

JOHANNESBURG – Nedbank chief executive and Banking Association South Africa (Basa) chairperson Mike Brown yesterday warned that the markets would be keeping a sharp eye on developments at National Treasury over an “unfortunate” possible exit of Finance Minister Nhlanhla Nene.

Brown, who was speaking on the sideline of the association’s annual banking summit, said that the markets would always be jittery over the future of someone like Nene.

“It is extremely unfortunate that the finance minister (Nene) has come under so much pressure as a consequence of his testimony at the Zondo Commission. We do not yet know enough about what happened in those meetings that could have benefited the Guptas,” Brown said.

Nene has been berated for previously denying he met the Guptas while he was first deputy minister of finance and later as the minister. He was heralded for testifying that he stood firm against signing the R1trillion nuclear deal, but was left with egg on his face over undisclosed visits to the Gupta Johannesburg compound. 

His testimony that he had made numerous visits to the family caught in the middle of allegations of state capture tarnished his previously immaculate reputation.

In 2016, the country’s big four banks, including Nedbank, closed Gupta-owned bank accounts after they detected several suspicious transactions. Brown himself testified at the commission last month and pointed the finger at former mineral resources minister Mosebenzi Zwane of putting pressure on the bank to keep Gupta accounts open.

“I left the meeting with the impression that a good outcome for the inter-ministerial committee would be for Nedbank to agree to take over the primary transactor of the Gupta accounts,” Brown told the commission.

Meanwhile, Auditor-General Kimi Makwetu told the summit that the embattled auditing profession could borrow from the banking sector’s tight regulation regime. He said there was an urgent need for the powers of his office to be expanded to rein-in the ballooning irregular expenditure across government.

“Irregular expenditure is getting out of control and we have found that people are constantly ignoring the recommendations by the attorney-general,” Makwetu said. He painted a bleak picture of how public finances were handled; telling the summit that irregular expenditure at national level surged from R11 billion in the 2010/11 financial year to a mammoth R50bn in 2016/17.

At local government level, irregular expenditure increased from R4bn in the 2010/11 year to more than R16bn in the past financial year. 

BUSINESS REPORT