March 17, 2016 / 6:58 AM / 4 years ago

South Africa jolted by claim Zuma's friends behind sacking of finance minister

JOHANNESBURG (Reuters) - South Africa’s government was rocked on Wednesday by suggestions that a wealthy family with close ties to President Jacob Zuma may have been behind his decision to sack the country’s respected finance minister Nhlanhla Nene in December.

South African counterpart Jacob Zuma gestures as he departs at the airport after an Africa Union-sponsored dialogue in an attempt to end months of violence in Burundi's capital Bujumbura, February 27, 2016. REUTERS/Evrard Ngendakumana

Deputy Finance Minister Mcebisi Jonas said the Gupta family had offered him Nene’s job but that he had rejected it immediately on the grounds that such a move violated South Africa’s democracy.

Jonas’s claims are likely to further undermine Zuma’s credibility and roil South Africa’s markets. Both have already been damaged by a public row between police and the man who eventually became finance minister, Pravin Gordhan.

Zuma alarmed investors and caused the rand to tumble in December when he first replaced Nene with David van Rooyen, a little-known politician with no financial background. Under a barrage of criticism, he then abruptly replaced van Rooyen just days later with Gordhan, who had held the job from 2009 to 2014.

Jonas said on Wednesday he had been offered Nene’s job before van Rooyen.

“Members of the Gupta family offered me the position of Minister of Finance to replace then-Minister Nene,” Jonas said in a statement. “I rejected this out of hand.

“The basis of my rejection of their offer is that it makes a mockery of our hard-earned democracy, the trust of our people and no one apart from the President of the Republic appoints ministers.”

The Gupta family denied they had offered anyone a job in the government and challenged Jonas to provide an account of the “supposed meeting that took place, under oath, in a court of law”. Zuma’s office was not immediately available to comment.

The Guptas, who moved to South Africa from India, run businesses ranging from uranium and coal mining to media and information technology.

Zuma has previously said his ties with the Guptas are above-board. Zuma’s son, Duduzane, is a director with Gupta family members of six companies, documents show.


Zuma’s ruling African National Congress said it would not condone having the family playing any role in appointing government officials.

“This is an issue we just can’t close our eyes to,” said a party spokesman, Zizi Kodwa. The ANC will take unspecified action at a meeting of its key decision-making organ this coming weekend, Kodwa said.

Opposition parties have claimed the Guptas were behind the firing of Nene.

“It’s clear the ANC has been captured. We must have a full parliamentary inquiry into the appointment of every single cabinet minister,” Mmusi Maimane, leader of the biggest opposition party, the Democratic Alliance, told Reuters.

Susan Booysen, a professor in the School of Governance at Wits University, said the ANC should remove Zuma from office.

“This is a president with very little credibility and no goodwill for the country,” she said.

The claims concerning the Guptas have erupted just as a prolonged confrontation between Gordhan and the elite Hawks police unit has raised concerns that the run on the rand and bonds seen in December could be repeated.

Moody’s analysts were due to visit South Africa on Wednesday after putting its Baa2 credit rating on review. Investors fear further political uncertainty could hasten a downgrade.

The rand hit a session low of 16.2440 per dollar on Wednesday before recovering after Jonas released his statement. The currency traded at 15.7300 by 1832 GMT.

It had tumbled more than 2 percent on Tuesday after the Hawks said Gordhan may face legal action for failing to answer questions about surveillance by the South African Revenue Service, which he headed from 1999-2009.

Standard & Poor’s and Fitch, which rate South Africa one notch above junk status, have also warned they could downgrade its ratings, which would sharply raise debt costs.

Commenting on Wednesday’s claims by Jonas, political analyst Gary van Staden from consulting firm NKC said: “It confirms our suspicions that the Gupta family has extreme and undue influence on public policy making and the president of the country.”

“I wouldn’t be surprised if the response from President Zuma was deafening silence, but it’s going to be difficult for him to dodge these questions in parliament tomorrow (at a pre-scheduled appearance) when he has to face questions from the house.”

Additional reporting by Stella Mapenzauswa, Ed Cropley and Tiisetso Motsoeneng; Writing by James Macharia; Editing by Larry King and Gareth Jones

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