The Democratic Alliance (DA)’s federal chairperson of finance and Member of Parliament (MP), Mark Burke, has been removed from parliamentary finance committees.
The party’s parliamentary leader, George Michalakis made the announcement on Wednesday.
Burke’s company, Kastelo, is under investigation after the South African Reserve Bank (SARB) flagged an alleged attempt to circumvent South Africa’s exchange-control regulations.
In a statement, Michalakis said the decision followed discussions with Burke.
“After consultation with Dr Mark Burke, we have decided that out of an abundance of caution, and to avoid any perceptions of a conflict of interest, he [Burke] will no longer serve on the finance committee or in the finance cluster while a company he is a beneficiary of is the subject of an inquiry by the SARB. We have now effected that change,” said Michalakis.
Kastelo was co-founded in 2018 by Burke and his brother, Nicholas, who is the CEO.
Business Day broke the story on the allegations that are contained in a Johannesburg High Court judgment concerning a dispute between Kastelo and SARB, in which the funds of the company held at Access Bank were frozen due to ongoing investigations.
When the scandal broke, Burke was quick to distance himself from the company, saying he had resigned as chairman in February.
Despite him distancing himself from the company, Burke still features prominently on the company website as a founder and chairman.
The Burke brothers and their company tried without success to dispute claims that Kastelo was transferring funds to the offshore account held at Access Bank; however, the Johannesburg High Court on July 28 found that the SARB had established a valid and objectively reasonable suspicion and ordered the fintech entity to pay SARB’s legal costs on an attorney-and-client scale, including the costs of two counsel.
‘This whole thing really embarrassed the party’
Insiders within the party stated that the scandal has put the DA in a bad light and the party had decided to save face and its tainted image by removing Burke from the finance cluster.
“This whole thing that was exposed by Business Day really embarrassed the party, and there was no way that the DA would weather the storm, and the only way to deal with it was for Mark to be removed. This has caused a PR nightmare for the party, and there was no way out of this,” said Sunday World‘s source.
Another insider said that this was the worst scandal to hit the DA, to the point that all the party bosses had to come up with a plan to manage the mess.
“This is the worst scandal to have hit the DA and the way the leaders of the party are trying hard to deal with the matter shows that it’s hectic. They never expected something like this to have happened. It’s a big mess,” said our insider.
Burke was replaced by Kingsley Wakelin.
Burke did not answer his phone when called for comment.
- Mark Burke, DA federal chairperson of finance and MP, was removed from parliamentary finance committees following an investigation into his company Kastelo by the South African Reserve Bank (SARB).
- Kastelo is under investigation for allegedly attempting to circumvent South Africa’s exchange-control regulations, with its funds at Access Bank frozen during the inquiry.
- The Johannesburg High Court found SARB's suspicions valid and ordered Kastelo to pay SARB’s legal costs after a failed dispute attempt by the Burke brothers and their company.
- Despite resigning as chairman in February, Burke still appears as founder and chairman on Kastelo's website, leading to perceptions of a conflict of interest within the DA.
- Burke was replaced by Kingsley Wakelin on the finance committees, and the DA leadership viewed the scandal as a significant embarrassment and PR crisis for the party.
