Cas Coovadia. Picture: FINANCIAL MAIL
Cas Coovadia. Picture: FINANCIAL MAIL

SA’s MAIN banking industry body says interference in the government by private groups is threatening the nation’s constitutional democracy, adding to a chorus of criticism over allegations that businessmen linked to President Jacob Zuma influenced Cabinet appointments.

The Banking Association of SA, which includes all major banks in the country, was commenting on an uproar over Deputy Finance Minister Mcebisi Jonas’s claim last week that he was offered a promotion to the Treasury’s top spot by members of the Gupta family, who are friends of Mr Zuma and are in business with his son. South Africans have described this sort of influence as "state capture".

"We must be clear that ‘state and corporate capture’ is a euphemism for blatant corruption," Banking Association MD Cas Coovadia said on Wednesday. "We remain deeply concerned and disturbed that the worrisome trend of undue and illegitimate influence and interference in the state continues to represent a clear and present danger and threat to the stability of our constitutional democracy."

The controversy has weakened Mr Gordhan’s bid to turnaround a weakening economy that is set to grow less than 1% this year and is threatened by a credit rating downgrade. Standard & Poor’s has a negative outlook on its BBB-rating, one level above junk. Moody’s Investors Service rates SA’s debt one level higher.

Mr Jonas’s claims triggered several senior members of the African National Congress (ANC) to make similar allegations about the Gupta family’s attempts to unduly influence the state. They prompted ANC secretary-general Gwede Mantashe to warn that SA was slipping into a "mafia state". The Gupta family has denied the accusations.

The allegations over the Guptas have fuelled disgruntlement with Zuma that peaked in December when he replaced his respected finance minister, Nhlanhla Nene, with a little-known legislator, sparking a sell-off of the rand and the nation’s bonds. Four days later, Mr Zuma reappointed Pravin Gordhan to the post, which he had held from 2009 to 2014, after coming under pressure from ANC and business leaders.

The rand declined as much as 16% against the dollar in the weeks after Mr Zuma fired Mr Nene on December 9. As at 1pm in Johannesburg on Wednesday, the rand was 4.6% weaker than the day before the finance minister was replaced.

Since then, Mr Gordhan has been involved in a dispute with the head of the South African Revenue Service, Tom Moyane, who he said defied an order to halt a management overhaul. The Hawks have asked Mr Gordhan to respond to questions about a unit in the tax agency set up to investigate high-profile tax dodgers during his time at its helm.

While he was able to block an attempt by the loss-making South African Airways to introduce an intermediary into an aircraft leasing agreement with Airbus, SAA’s chairwoman, Dudu Myeni, who was promoting the deal, has remained in her post. She is also the head of Mr Zuma’s personal foundation.

A weekend meeting of the ANC’s leadership endorsed Mr Gordhan, a decision the Banking Association said "provides a timely degree of political certainty". It did not comment on the ANC’s backing of Mr Zuma’s leadership.

The nation’s graft ombudsman said on Tuesday that it would investigate Mr Zuma’s relationship with the Gupta family. The ANC also supported Mr Jonas following his revelations and said it would investigate claims of undue influence by the Gupta family.

The Banking Association said the ANC’s probe "cannot be a proxy for being answerable to accountability and investigating authorities."