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Gordhan war over S. African finances approaches endgame

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With a medium term budget policy statement scheduled for October 26, Gordhan has indicated he will slash his own initial growth forecast of 0.9%.

Abrahams had said on Tuesday that Gordhan, in his previous role as head of the South African Revenue Service (SARS), cost the tax agency about 1.1 million rand ($79,000) by approving early retirement for a deputy commissioner in 2010 and re-hiring him as a consultant.

Mr. Gordhan confirmed that he has been summoned to a court appearance on November 2 for the fraud charges after an investigation by a controversial police unit known as the Hawks.

The president has denied the claims, and said he was not at war with the finance minister.Abrahams said: "I can assure you there has been no political interference in this matter".

"Mr Kathrada has offered to walk with Mr Gordhan into the court room because the National Treasury has really come to symbolize the fight against corruption in this country". He confirmed that prosecution officials had delivered the summons to appear in court to his house on Tuesday morning.

Gordhan was engaged in a fierce battle within the ruling African National Congress (ANC) party over control of the treasury, AFP reported.

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However, Abrahams made an about turn on Wednesday while addressing members of parliament when he announced that doors were still open for Gordhan to have discussions relating to the NPA's decision to charge him. President Jacob Zuma has largely been silent on the issue and is now in Kenya on a state visit. Summonses were also served on former Sars commissioner Oupa Magashula and Pillay. We had repeatedly requested that the NDPP afford Minister Gordhan the opportunity to make written and/or oral representations before making a decision on whether to prosecute or not. He has often clashed with Zuma and senior ministers over excessive spending, especially at struggling state-run entities such as South African Airways.

The risk of a downgrade and increased policy uncertainty "are largely discounted by the market and South African bonds trade cheap to fair value", Regis Chatellier, a London-based emerging-market strategist at Societe Generale, said in a note on Thursday.

Finance Minister Pravin Gordhan seems unfazed by criminal charges of fraud hanging over his head as he continues with his work to save the country's ailing economy.

Gordhan is leading joint efforts by the government, business and labour unions to reignite economic growth headed for its slowest expansion since the 2009 recession. The president reaffirmed his support for Gordhan and urged the prosecutor "and other institutions concerned to conduct the matter with the necessary dignity and respect".

The news comes at an inconvenient time for Gordhan, who spent the last week at the International Monetary Fund annual meetings in Washington attempting to woo investors and foreign politicians with the idea South Africa was starting to turn itself around.

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