South African rand falls to new low

By Hassan Isilow

JOHANNESBURG, South Africa (AA) - South African currency rand slid to a record low Tuesday after prosecutors issued formal summons for Finance Minister Pravin Gordhan to answer fraud charges.

The charges relate to the time when Gordhan served as head of the South African Revenue Services between 1999 and 2009.

National Prosecuting Authority head Shaun Abrahams announced at a televised media briefing in the capital Pretoria he had issued the summons for the minister and two other ex-officials of the revenue services.

“They have been served with their summons which list the charges,” Abrahams said. He said the trio would appear before a Pretoria regional court on Nov. 2.

Gordhan is accused of approving huge sums of money to Ivan Pillay, a former deputy commissioner of the revenue service, who took early retirement at the age of 56 in 2010.

Following the news, the rand, which was trading at 13.70 to the U.S. dollar for many weeks, hit a new low of 14.23 by Tuesday morning. This is a record low since the quarter of this year.

The country’s economy was still recovering when President Jacob Zuma fired two finance ministers in December leading to market turmoil.

The summons comes barely a week after the minister, who is credited with stabilizing the economy and allying investor confidence, returned from an overseas trip. Prosecutors also accuse the minister of illegally establishing a unit to investigate organized crime and tax evasion at the revenue service.

According to Abrahams, only the president was authorized under the constitution to establish an intelligence agency in the country.

Andre Duvenhage, a politics professor at the Northwest University, told Anadolu Agency he believed the charges against the minister were politically motivated, especially since he was opposed to President Jacob Zuma.

However, Abrahams denied at the briefing that political interference might have influenced him to summon the minister.