JSE-listed Phumelela Gaming and Leisure on Tuesday 30 July won a court interdict preventing Public Protector Busisiwe Mkhwebane’s wide-ranging remedial action on the horse racing industry from being implemented while her report is taken on judicial review.
The public protector did not oppose the urgent interdict application in the North Gauteng High Court, delivered only a day after Public Enterprises Minister Pravin Gordhan won an interdict against another of Mkhwebane’s reports.
If successful, the Phumelela review would continue to weaken Mkhwebane’s position while the DA and organisations such as the Helen Suzman Foundation, the Council for the Advancement of the South African Constitution (Casac) and Corruption Watch have called on Parliament to hold an inquiry into her fitness to hold office after multiple court rulings against her and allegations of bias and incompetence.
Phumelela accuses the public protector of failing to follow a fair process and violating the separation of powers doctrine, essentially making the same legal errors she was slammed for by the courts for her investigation into the apartheid Bankorp bailout involving the SA Reserve Bank and Absa.
“The final report is the product of fatal procedural irregularities and is riddled with material errors of law, material errors of fact, the reliance upon irrelevant considerations, the failure to have regard to relevant considerations and actions which exceed the scope of the public protector’s powers,” charged Phumelela CEO John Stuart in his affidavit.
“Phumelela further submits that the report is tainted with bias,” he continued.
The public protector’s May 2019 report found the corporatisation of the horse racing industry, resulting from a 1997 Gauteng government decision, had failed society and helped enrich Phumelela through the levies it receives from bookmakers.
“The process of corporatisation of the industry was not in the public interest at all. It better served the rich and the elite in the society thus making the rich, richer,” Mkhwebane observed in the report.
The remedial action ordered President Cyril Ramaphosa to appoint a ministerial committee to establish a thoroughbred horse racing regulator, for premiers to withdraw the bookmaker levy fees paid to Phumelela and for premiers to request Ramaphosa to get the Special Investigating Unit to investigate the matter.
Phumelela will argue that Mkhwebane has once again overstepped by telling the president how to act and including orders that would require both national and provincial legislatures to pass new laws.
Fresh off the Constitutional Court ruling that Mkhwebane personally pay 15% of the Reserve Bank’s legal costs, Phumelela is calling for the public protector to personally pay 25% of any legal costs ordered against her office.
In its court papers, the company repeatedly refers to the Absa and Reserve Bank cases against Mkhwebane, where she was heavily criticised in court for her conduct during her investigation, omitting information in her report and breaching her powers by calling for the Reserve Bank’s mandate to be amended.
Mkhwebane failed to include any of her remedial actions in her provisional report, Phumelela argues, failing to give the company or any of the many government officials involved a chance to comment before the report was released.
“This is not the first time that the public protector has failed to disclose contemplated remedial action in a provisional report,” read Phumelela’s court papers.
It continues: “Phumelela contends that the public protector’s remedial action is unlawful and unconstitutional in three main respects: first — it unlawfully interferes with parliamentary legislative authority; second — it unlawfully interferes with provincial legislative authority; and third, it requires amendments to provincial legislation, and thus again unlawfully interferes with provincial legislative authority. This kind of remedial action has previously been declared to be unlawful.”
In his affidavit, Stuart attacks Mkhwebane’s recent conduct.
“What is of particular concern is that the public protector has taken no heed of the criticisms against her in the Absa litigation. Instead, she has taken to Twitter to tell all and sundry that the Absa case was ‘won on technicalities’,” he writes.
“Her cavalier disregard for what she describes as ‘technicalities’ has resulted in her, once again, prescribing to Parliament and the provincial legislatures how they should exercise their legislative autonomy in direct breach of the principle of separation of powers and division of legislative competence,” he continued.
The review of the Phumelela report could bolster calls for Mkhwebane’s removal, although the public protector herself has pointed out that Parliament is yet to create a process for how a head of her office could be fired.
In a torrid week for Mkhwebane, she will return to court on Thursday where Ramaphosa will challenge her finding against Public Enterprises Minister Pravin Gordhan’s approval of former SARS deputy commissioner Ivan Pillay’s early retirement.
While the political battle over Mkhwebane’s role and influence reaches fever pitch, the Phumelela case will shed further light on her competence. DM
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