The South African Reserve Bank (SARB) has recently concluded its investigation into the Phala Phala matter. This issue has been of great public interest and has involved significant political parties. The investigation began in June 2022, following allegations by Mr. Arthur Fraser. The SARB received complaints from various parties and subsequently launched an investigation.
The Investigative Process
SARB’s Financial Surveillance Department (FinSurv) conducted the investigation in two phases. The first phase involved an analysis of internal information, databases, and cross-border foreign exchange transactions during the relevant period. The second phase involved requesting and receiving additional information, documents, statements, and affidavits. Interviews were conducted with various individuals, and legal advice was sought and obtained throughout the investigation.
The investigation spanned approximately a year and covered various aspects, including the consideration of dozens of documents and information running into hundreds of pages. The scope and purpose of the investigation were limited to determining whether there were exchange control violations in terms of the Exchange Control Regulations of 1961, concerning the foreign currency allegedly stolen from the Phala Phala farm on 9 February 2020.
SARB’s Findings
Based on the available evidence, legal framework, and advice, SARB’s finding is that there was no perfected transaction, and thus no contravention of the Exchange Control Regulations by Ntaba Nyoni Estates CC or the President. This conclusion stems from the fact that the transaction in question was subject to conditions precedent which were not fulfilled, meaning no legal entitlement to the foreign currency within the context of Regulation 6(1) existed.
Governor’s Feedback
The Governor of SARB is expected to provide feedback to Parliament within the applicable legal constraints during their upcoming engagement. While the SARB’s report remains confidential, the public can rest assured that a thorough investigation has taken place and that, at least in terms of exchange control regulations, no violations were found.
As the South African Reserve Bank closes this chapter, the country eagerly awaits further developments and insights into the Phala Phala matter. The SARB’s findings offer some solace in knowing that its institutions remain vigilant and dedicated to upholding the highest standards of conduct and integrity. And as the story unfolds, the nation will continue to watch with interest, hoping that justice and transparency will ultimately prevail.
