South Africa

Ramaphosa not entitled to Phala Phala dollars – Reserve Bank

The South African Reserve Bank (SARB) has finalised its investigation and report into President Cyril Ramaphosa’s Phala Phala farm’s sale of buffalo for $580,000.

The Reserve Bank found that the president did not contravene the Exchange Control Regulations but was not ‘legally entitled’ to this foreign currency transaction.

“On the facts available to it, the SARB finds that there was no perfected transaction and thus, the SARB cannot conclude that there was any contravention of the Exchange Control Regulations by Ntaba Nyoni Estates CC or, for that matter, by the President.”

“That is because the SARB has concluded that the transaction in question was subject to conditions precedent which were not fulfilled, and therefore there was no legal entitlement, within the meaning of Regulation (6)(1), on the part of Ntaba Nyoni Estates CC, to the foreign currency.” 

In other words, because Sudanese businessman Hazim Mustafa – who attempted to buy the buffalo from the president – never received delivery of the buffalo, there was no legal obligation on Ramaphosa or Ntaba Nyoni to have declared the foreign currency under exchange control regulations.

The SARB’s investigation was launched in light of allegations made by Arthur Fraser in June 2022 and the subsequent receipt of complaints from various roleplayers, including political parties.

Following the accusations, the Financial Surveillance Department (FinSurv) of the SARB conducted its investigation in two phases. 

The initial phase involved a consideration of internal information and databases and the analysis of cross-border foreign exchange transactions over the relevant period. 

This was followed by a more comprehensive phase involving FinSurv requesting and receiving additional information and documents, supplemented by statements and affidavits and, thereafter, conducting interviews with various individuals and liaising with other parties. 

FinSurv also sought and obtained legal advice concerning its investigation and the process it followed. 

The SARB said the investigation was undertaken over approximately a year and was comprehensive, having regard to the limited mandate of the SARB and FinSurv in this matter.

This mandate included whether there were exchange control violations, among other things.

“It is pertinent to recognise that the scope and purpose of the investigation and report in this matter are limited to whether there were exchange control violations, in terms of the Exchange Control Regulations of 1961, in respect of the foreign currency allegedly stolen from the Phala Phala farm on 9 February 2020,” the SARB said. 

“This is the mandate of the SARB in this matter. Other matters and where they may relate to the breach (if any) of any other law or otherwise are matters which are to be addressed by the relevant authorities (not the SARB).” 

Due to legislative requirements and constraints, the SARB’s report on this matter is a private internal report and will not be made available to the public. 


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