On Friday, 24 November 2017, the Public Protector filed her answering affidavit in response to the review applications brought by Absa, seeking the setting aside of the Public Protector’s Report on the financial assistance provided by the South African Reserve Bank to Bankorp. Absa acquired Bankorp at fair value in 1992.

The Public Protector’s affidavit was initially due on 16 October 2017. But, after the Public Protector’s legal team withdrew in early October the Public Protector first sought a postponement to the end of January 2018, before conceding – in the midst of the postponement application – to file on 24 November 2017.

Absa, on Monday, 27 November, filed its replying affidavit to the Public Protector’s answering affidavit. The High Court of South Africa in Pretoria will hear the matter from 5 to 7 December 2017.

Our points in response to the Public Protector’s answering affidavit include the following:

In an attempt to deal with the inadequacies of her Report, the Public Protector claims that she never intended to compel the Special Investigating Unit (SIU) to recover anything from Absa. She now contends that her Report merely requested the President to consider asking the SIU to conduct yet a further investigation into who, if anyone, should repay this financial assistance.

This would be the fourth investigation into the financial assistance provided to Bankorp, after the Heath, Davis and Public Protector investigations. This is a retreat from her Report’s unambiguous requirement that the SIU recover R1.125 billion from Absa.

As with the portion of the Report where she sought to compel Parliament to change the Constitution regarding the SARB’s mandate (which was set aside earlier this year), when challenged on the unsustainable and impermissible relief, the Public Protector has sought to suggest she only meant her relief to be a suggestion. Such an interpretation ignores the plain language and context of the remedial action.

The Public Protector’s answering affidavit seeks to introduce new justifications and reasoning in support of the unlawful remedial action. The new reasons which did not inform the Public Protector’s Report, have never been put to Absa for a response before the Report was issued.

In Absa’s view, apart from being legally impermissible, these attempts amount to an admission that the Report cannot stand on its own. An example is the acknowledgment that the Public Protector has sought the advice of an economist only after the review applications were launched and the Public Protector now seeks to use the economist’s advice to justify the Report. Absa contends, in any event, that much of the economist’s submissions are focused on matters of law and not economics.

Absa has also submitted an affidavit by economist Dr Iraj Abedian in which he challenges the views expressed in the economist’s report provided by the Public Protector.

The Public Protector has failed to adhere to the standards demanded of an organ of state in litigation. She has neither engaged candidly nor unambiguously with the evidence, nor has she complied with her obligations to furnish the full Rule 53 Record to the parties.

The Public Protector has failed to conduct a fair and unbiased investigation. The Public Protector has for example failed to address at all the meeting that she had with the State Security Agency on 6 June 2017, a mere two weeks before the Report was issued, in which the discussion appears to have centred on appropriate strategies for how to achieve appropriate relief against the SARB (by changing its mandate ) and Absa.

On 7 June 2017, the Public Protector met with the Presidency where the “appropriate” remedial action was also discussed. The Public Protector has sought to justify her meeting with the Presidency’s legal advisors as in order to agree with the Presidency what remedial action was appropriate – after the Presidency objected to being required to form a commission of enquiry, which was required in the Provisional Report.

Even if this is accepted, such consultation was clearly unfair as she did not afford the party most affected – Absa – a similar opportunity to address her on the her unlawful remedial action.
For all the reasons above, Absa seeks that the remedial action in the Report directed at Absa is reviewed and set aside and that the Public Protector is ordered to pay Absa’s legal costs on a punitive scale.