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Finance minister's indictment shocks South African economy

October 11, 2016

South Africa's finance minister has been indicted for fraud in a move that sent the nation's currency tumbling and shocked the economy. Prosecutors say the charges stem from his role as chief of the nation's tax agency.

Südafrika Finanzminister Pravin Gordhan
Image: picture-alliance/AP Photo/S. van Zuydam

The National Prosecuting Authority (NPA) chief told reporters that Pravin Gordhan would be prosecuted over alleged misconduct when he was chief of the South African Revenue Service. He is due to appear in court on November 2.

Gordhan and two others "must be prosecuted and arraigned on the following crimes: count one, fraud," chief prosecutor Shaun Abrahams said. He angrily rejected allegations that the NPA was steered by politics.

"The days of disrespecting decisions of the National Prosecuting Authority are over," Abrahams said. "The days of non-accountability and not holding senior government officials accountable are over."

NPA's case is centered on allegations that Gordhan illegally authorized an early retirement package for a senior colleague at SARS, which Gordhan headed between 1999 and 2009.

Gordhan, who also served as finance minister from 2009 to 2014, has clashed with members of the ruling African National Congress (ANC) party over control of the treasury.

President Jacob Zuma has publicly backed Gordhan, who as often clashed with Zuma and senior ministers over alleged excessive spending, particularly at cash-bleeding state-run entities such as South African Airways.

Currency slides amid of political fighting

In a related development, the chief prosecutor says he's still studying a Constitutional Court order from last week which said the NPA could not appeal a ruling that may see corruption charges reinstated against President Zuma.

The High Court in April ordered a review of an NPA's decision to set aside hundreds of corruption charges against Zuma, calling it "irrational." That decision had allowed Zuma to run for president in 2009.

The mixture of political and economic turmoil has shaken markets. The South African rand dropped as much as 3.4 percent against the US dollar shortly after the indictment of the finance Minister.

South Africa's sustainable energy sector

jar/kl (AFP, Reuters, AP)


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