S.Africa prosecutor drops fraud case against minister

South Africa’s top prosecutor on Monday dropped fraud charges against Finance Minister Pravin Gordhan and his co-accused, in a case that has exposed tensions in ruling ANC party and government.

The bombshell charges earlier this month had driven a wedge between rival camps in the ruling African National Congress, rattled the markets and led to a fall in the value of the rand.

“I have directed the summons to be withdrawn with immediate effect,” Shaun Abrahams told journalists, saying the charges against him would be difficult to prove.

The move came a day after Abrahams’ spokesman had rubbished a report saying the prosecutor had decided to drop the charges, describing it as “absolute hogwash”.

Gordhan, a respected ANC veteran, had been due to appear in court on Wednesday on charges dating back to 2010 over a colleague’s retirement package.

Announcing the decision, Abrahams said he did not believe Gordhan intended to break the law.

“I foresee difficulties to prove knowledge of unlawfulness,” he said.

Gordhan has claimed the charges were politically motivated, and won backing from several high-profile ANC politicians, the nation’s deputy president Cyril Ramaphosa, numerous ministers and scores of business leaders.

His imminent prosecution had sparked investor fears that he would also be sacked, as the country reels from an economic downturn and declining business confidence.

Political analyst Judith February criticised the National Prosecuting Authority’s decision, saying it exposed the institution as being led by someone “who is clearly incompetent at best, and at worst, politically captured.”

“There will be a perception that the prosecuting authority is being used as a football in a game of state capture,” said February, an analyst with the Pretoria-based Institute for Security Studies.

– Critic of Zuma’s government –

Gordhan has been a vocal opponent of corruption and excessive spending by President Jacob Zuma’s government, which has been hit by a series of graft scandals and slowing economic growth.

Abrahams rejected claims that the charges against Gordhan were politically motivated, saying he did not “pay regard to political considerations.”

Marches in support of Gordhan had been planned outside the court in Pretoria on Wednesday, with alliance partners of the ANC voicing their support for the embattled minister.

Last week, the ANC’s chief whip Jackson Mthembu lambasted Gordhan’s prosecution, saying the decision to use state institutions to fight political matters should force the entire ANC leadership to resign.

The ANC has welcomed the decision not to prosecute Gordhan, saying the charges would have had “a negative impact on the economy and created unnecessary speculation about the real motive.”

“The ANC always believed in the innocence of comrade Pravin Gordhan, hence our unwavering support,” a party statement said.

– Abrahams under fire –

The main opposition Democratic Alliance said the charges were motivated by narrow political considerations, berating Abrahams for making “an embarrassing about-turn” that had left him with “egg on his face”.

The party called on Zuma to suspend Abrahams.

Gordhan, who had served as finance minister between 2009 and 2014, was re-appointed last December to calm panicked investors after Zuma sacked two finance ministers within four days.

His reinstatement stabilised the markets and the local currency as he stressed his intention to rein in spending, tackle graft and reduce the budget deficit.

He has vowed to revive the economy that is forecast to grow just 0.4 percent, while also facing the risk that its credit rating be downgraded to junk status before year end.

Zuma had responded to Gordhan’s legal woes by saying he “was innocent until found guilty”.

The rand rallied to 13.54 against the dollar on news that the charges against him were being dropped, in its strongest showing in two months.

Gordhan had also faced a police investigation over an alleged illegal “spy unit” that targeted politicians during his time as head of the tax collection department between 1999 and 2009.