DA MP Mark Burke under fire as Kastelo faces R4bn Reserve Bank probe

DA MP and Federal Finance Chair Mark Burke faces calls for removal from Parliament’s finance committees following allegations against Kastelo and a High Court ruling involving the Reserve Bank.

Democratic Alliance (DA) MP Mark Burke is facing calls for his removal from Parliament’s finance-related committees after the High Court dismissed a challenge by fintech company Kastelo over a Reserve Bank blocking order linked to suspected exchange-control contraventions involving about R4 billion.

Kastelo, which Burke founded and chairs, is the subject of a South African Reserve Bank (SARB) investigation into its business activities.

The Johannesburg High Court dismissed Kastelo’s application to set aside a Reserve Bank order freezing its bank account on July 28.

The court found that the Reserve Bank had established a valid, objectively reasonable suspicion.

The allegations are contained in a Reserve Bank affidavit, which states that investigators identified a reasonable suspicion of exchange-control contraventions involving approximately R4 billion.

Kastelo is led by Burke’s brother, Nicholas Burke, who serves as its chief executive officer.

The Reserve Bank’s allegations have prompted both the African National Congress (ANC) Parliamentary Caucus and the Economic Freedom Fighters (EFF) to call for action over Burke’s continued participation in Parliament’s finance-related oversight structures.

The ANC has called on the DA to remove Burke from the Standing Committee on Appropriations and his alternative membership of the Standing Committee on Finance, pending the conclusion of the relevant investigations.

The caucus said the allegations included the use of third parties’ foreign investment and discretionary allowances to externalise funds, transactions allegedly conducted without clients’ knowledge or participation, and alleged misrepresentation of Kastelo’s activities in compliance declarations submitted to the Reserve Bank.

It said the allegations raised questions about the integrity of South Africa’s financial system, the movement of capital across the country’s borders and the possible circumvention of exchange-control regulations.

The caucus said Members of Parliament should be held to a higher standard and should lead by example to maintain public confidence in South Africa’s democratic system.

“Certainly, MP Burke's association with this entity falls short of the standard expected of the Members of our Parliament,” it said.

The ANC questioned how Burke could continue sitting on parliamentary structures responsible for scrutinising financial regulation and holding the Reserve Bank to account while allegations involving Kastelo were being investigated.