The South African Reserve Bank (SARB) has completed its investigation and report on the Phala Phala matter, a case that has garnered much public attention. The investigation was launched in response to allegations made by Mr. Arthur Fraser in June 2022, which were followed by complaints from various political groups. The SARB’s report remains private due to legislative restrictions but some information on the investigative process, duration, extent, and findings have been shared.
Investigative Process
The SARB’s Financial Surveillance Department (FinSurv) conducted the investigation in two phases. The first phase involved examining internal information, databases, and cross-border foreign exchange transactions over the relevant time period. In the second phase, FinSurv requested and received additional information, documents, statements, and affidavits. They also conducted interviews with various individuals and sought legal advice throughout the process.
Investigation Scope
The investigation focused on the potential exchange control violations related to the foreign currency allegedly stolen from the Phala Phala farm on February 9, 2020. Any other breaches of the law were left for the relevant authorities to address. Despite its extensive nature, the SARB’s mandate remained focused on determining if any exchange control violations occurred under the Exchange Control Regulations of 1961.
Investigation Findings
After reviewing documents, statements, and information, and conducting formal interviews with key individuals, the SARB found that there was no perfected transaction, indicating that neither Ntaba Nyoni Estates CC nor the President had violated Regulation 6(1) of the Exchange Control Regulations. The SARB concluded that the transaction in question was subject to conditions precedent, which were unfulfilled. Therefore, Ntaba Nyoni Estates CC had no legal entitlement to the foreign currency under Regulation 6(1).
Feedback to Parliament
The Governor will provide feedback on the investigation during the upcoming engagement with Parliament, adhering to applicable legal constraints. While the report remains private, the information shared by the SARB demonstrates the depth of the investigation and the thoroughness with which they have approached this matter of significant public importance.
