Ramaphosa off the hook as Reserve Bank releases Phala Phala report

The South African Reserve Bank (Sarb) says it “cannot conclude” that Ntaba Nyoni Estates or President Cyril Ramaphosa flouted foreign-exchange control laws in its report into the Phala Phala matter.

The Bank confirmed it had finalised its investigation into the saga last week Monday in a statement released on Monday. 

The probe came as a result of allegations made by former correctional services boss Arthur Fraser and complaints by numerous parties to the Reserve Bank, it said in a statement.

“Due to legislative requirements and constraints which apply to the Sarb, the report by the Sarb into this matter is a private internal report and will not be made available to the public,” it said.

However, the bank released certain information around the investigative process followed, the duration and extent of its investigation and the scope and purpose of the probe. 

On the first, it explained that its Financial Surveillance Department (FinSurv) carried out the probe in two phases.

“The initial phase involved a consideration of internal information and databases and the analysis of cross-border foreign exchange transactions over the relevant period. This was followed by a more comprehensive phase involving FinSurv requesting and receiving additional information and documents, supplemented by statements and/or affidavits and thereafter, conducting interviews with various individuals and liaising with other parties.

“FinSurv also sought and obtained legal advice in relation to its investigation and the process it followed. Based on the information, documentation and evidence received and considered as part of the investigation, the legal framework applicable to exchange controls, the mandate of the Sarb and FinSurv and legal advice, the Sarb then finalised its investigation and report,” it said.

The investigation took about a year to complete and “was a comprehensive investigation, having regard to the limited mandate of the Bank and FinSurv in this matter”, it added. This included:

• whether there were exchange control violations (which we address more fully hereunder) and involved, among other things;
• considering dozens of documents and related information, running into hundreds of pages;
• obtaining and/or considering no less than 15 affidavits or statements;
• liaising with other parties including relevant authorities; and
• undertaking formal interviews with the relevant individuals.

Regarding the scope and purpose of the investigation, the bank said: “It is pertinent to recognise that the scope and purpose of the investigation and report are limited to whether there were exchange control violations, in terms of the Exchange Control Regulations of 1961, in respect of the foreign currency allegedly stolen from the Phala Phala farm on 9 February 2020.

“This is the mandate of the Sarb in this matter. Other matters and where they may relate to the breach (if any) of any other law or otherwise, are matters which are to be addressed by the relevant authorities (not the Sarb).”

Based on this, the bank found that: “On the facts available to it, the Sarb finds that there was no perfected transaction and thus the Sarb cannot conclude that there was any contravention of the exchange control regulations (the applicable regulation is regulation 6(1)) by Ntaba Nyoni Estates CC (the entity involved) or for that matter by the president.

“That is because the Sarb has concluded that the transaction was subject to conditions precedent which were not fulfilled, and therefore there was no legal entitlement, within the meaning of regulation (6)(1), on the part of Ntaba Nyoni Estates CC, to the foreign currency. The governor will provide feedback within the applicable legal constraints to parliament during the Sarb’s upcoming engagement with parliament.”

The furore over the robbery at his farm first erupted more than a year ago when Fraser, the former head of the country's spy agency, laid charges against Ramaphosa. Fraser alleged that the president sought to cover up the 2020 theft, in which at least $580,000 (R10.7m) of cash was stolen and stashed in a sofa at his game farm. 

Sars found in March that Ramaphosa and the entities that run his cattle business are tax compliant.

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Additional reporting by Bloomberg