AN OPEN LETTER TO MCKINSEY

Dear Steve John, your e-mail to me — in which you copied Business Day editor Lukanyo Mnyanda and FM editor Rob Rose — refers. The editors remain copied here. I wish to point out, though, that you neglected to copy in your own colleagues. In the interests of transparency, I have taken the liberty of copying Mckinsey global managing partner Kevin Sneader, SA managing partner Saf Yeboah-amankwah and senior partner Ozgur Tanrikulu into our correspondence.

Let me inform you that your instruction that your “short” letter is “not for publication” — written in bold capital letters right at the top of the page — shall be honoured. What I shall publish, though, is my response. And I shall do so with any further correspondence I may receive from you on this matter — a matter that largely concerns the R1.6bn that Eskom paid to Mckinsey and Trillian Capital Partners.

For the record, your e-mail was Mckinsey & Co’s response to two articles I wrote: “SA’S Gangster’s Paradise”, published on this page on July 12; and “Eskom in Bid to Recoup Interest from Mckinsey”, in the Business Day of July 13. This is a summary of my response. So let us begin.

You claim to respect my right to hold what you call “strong opinions in these matters”, as well as “the editorial stance of both newspapers to enable you to express your opinions freely”. I do not doubt this.

I must tell you, Steve: both of these are credible news publications that have earned the trust of their readers and the support of their advertisers for exactly these reasons. We pride ourselves on professionalism, integrity, editorial independence and the accuracy of the news we publish.

But we also play our own small role as citizens in supporting our young democracy — the basic tenet of which is freedom of speech. I would have thought this to be a given. So I’m surprised that it would draw such a seemingly astonished reaction from no less an institution than Mckinsey.

But let’s get into some substantive issues.

Too much — R1.6bn too much

I find it rich — too rich, in fact — for Mckinsey to lecture anyone about the truth, principles and fairness.

Let me tell you, Steve, that the highest standards of ethics, truth and fairness begin with never taking that which does not belong to you in the first place.

On July 9, Sneader admitted: “It [the payment] should not have happened. Our commercial approach led to a fee that was too large.”

With that, after two years of denials and bluster, Mckinsey finally agreed to return to Eskom the R902m it was paid. Not the interest, mind you. Just R902m of R1.6bn that should never have been paid into Mckinsey and Trillian’s bank accounts in the first place.

Mckinsey also partnered with such outfits as Regiments Capital in SA. Regiments enjoyed a long and profitable relationship with Mckinsey, developed over years of contracted work at Transnet. The value of that work is yet to be determined. Then, in November

2015, Trillian emerged to replace Regiments.

No sooner had Mckinsey and Trillian appeared at Eskom’s door than R1.6bn had been paid over — for exactly zero value, according to Eskom.

Steve, let me remind you just how large that fee was: it was R1.6bn too large. Especially given the value Eskom received for it.

This country’s entire fortune — and the fate of its more than 57 million citizens — is inextricably linked to the fates of companies such as Eskom and Transnet. They are owned by the state on behalf of the people. I am one of these. So until such time as every cent is paid back — including interest — Mckinsey can expect publicity from myself and from this magazine.

The highest standards of ethics, truth and fairness begin with never taking that which does not belong to you in the first place