Who gets paid?

The ANC has al­ready ben­e­fited

Finweek English Edition - - Openers - SIKONATHI MANTSHANTSHA

WHEN NELSON MAN­DELA re­turned from one of his many over­seas fund-rais­ing ven­tures in 1992, lit­tle did he know that the R100 000 he put in a trust would mul­ti­ply into a bil­lion rand em­pow­er­ment em­pire in 15 years. That em­pire be­came Thebe In­vest­ment Cor­po­ra­tion, with as­sets es­ti­mated at more than R1bn at end-2006 and 73,67% owned by the Batho Batho Trust.

Sell­ing mi­nor­ity stakes – 26,4% in to­tal – to fi­nan­cial in­sti­tu­tions San­lam, Old Mu­tual and In­vestec raised other funds and ce­mented a work­ing re­la­tion­ship with Thebe.

But af­ter 15 years of ex­is­tence, the trust has no clearly de­fined ben­e­fi­cia­ries to which it will dis­trib­ute any fi­nan­cial ben­e­fits. De­spite Thebe con­sis­tently mar­ket­ing it­self as a broad-based black eco­nomic em­pow­er­ment com­pany rep­re­sent­ing com­mu­ni­ties, Molefe Tsele, Batho Batho’s man­ag­ing trustee, could nei­ther iden­tify nor give a num­ber of the trust’s ben­e­fi­cia­ries. Thebe is Batho Batho’s sole in­vest­ment.

Thebe says it’s now at a stage where it’s ready to pay div­i­dends, with the first pay­ment to be made in its 2008 fi­nan­cial year. Thebe’s pol­icy is to dis­trib­ute 20% of its prof­its to share­hold­ers and Batho Batho ex­pects up to R40m/year. Tsele says do­na­tions to po­lit­i­cal par­ties would be one form of sup­port.

A trust doc­u­ment in the pos­ses­sion of Fin­week says: “The trust has been able to re­alise some eco­nomic ben­e­fit from its share­hold­ing in Thebe. Over the years a sum of R128m has been re­alised by the trust.”

It goes on to say some of that ben­e­fit has been dis­bursed and ap­plied within the ob­jec­tives of the trust – with­out giv­ing any de­tails. While ad­mit­ting that the trust did make a do­na­tion to the ANC in April 2006, Tsele re­fused to re­veal the amount.

Tsele says the Batho Batho Trust’s found­ing ob­jec­tives were to sup­port the so­cioe­co­nomic de­vel­op­ment of black South Africans and to pro­mote, en­cour­age and fa­cil­i­tate the eco­nomic de­vel­op­ment, par­tic­i­pa­tion and in­volve­ment of black South Africans gen­er­ally.

ANC heavy­weights – Man­dela, Wal­ter Sisulu, for­mer Trea­surer-Gen­eral Thomas Nkobi and Bey­ers Naudé – were the found­ing trustees in Batho Batho.

The cur­rent board of trustees also reads like a who’s who of the ANC. Tsele is for­mer Gen­eral-Sec­re­tary of the SA Coun­cil of Churches; Kenny Fihla, CEO of Busi­ness Against Crime, is a for­mer chair­man and se­nior coun­cil­lor of the ANC in Jo­han­nes­burg; Valli Moosa, ANC NEC mem­ber, busi­ness­man and for­mer Cabi­net min­is­ter; Si­bongiseni Dhlomo, a se­nior med­i­cal gen­eral in the SA Na­tional Defence Force and a for­mer uMkhonto Wesizwe oper­a­tive; and Gertrude Shope, chair­man of the Free­dom Park Trust, for­mer ANC MP and past pres­i­dent of the ANC Women’s League.

Says Tsele: “Batho Batho orig­i­nated around the open­ing of the po­lit­i­cal cli­mate in the early Nineties. The prob­lem was a lot of de­pen­dency on in­ter­na­tional friends of the so­ciopo­lit­i­cal ac­tivist or­gan­i­sa­tions. The ques­tion was: Are we go­ing to con­tinue to de­pend on our in­ter­na­tional friends for con­tin­ued fund­ing?”

Black po­lit­i­cal, civic and non- gov­ern­men­tal or­gan­i­sa­tions were out of the eco­nomic realms of SA and couldn’t con­tinue to rely on the donor com­mu­nity. A so­lu­tion was thought to be to in­vest funds for the ben­e­fit of such or­gan­i­sa­tions to en­sure the at­tain­ment and ad­vance­ment of democ­racy.

“It was a peo­ple’s trust, whose sole rea­son for ex­is­tence was to sup­port the pre­dom­i­nantly black or­gan­i­sa­tions, ir­re­spec­tive of po­lit­i­cal af­fil­i­a­tion,” says Tsele. And thus Thebe was born, owned and con­trolled by Batho Batho, which also ap­points its direc­tors and se­nior man­age­ment.

Now that Thebe is in a po­si­tion to pay div­i­dends, Tsele says the Batho Batho Trust is also evolv­ing from be­ing a child of a par­tic­u­lar po­lit­i­cal time into a broader so­cial ve­hi­cle. Tsele’s ap­point­ment as man­ag­ing trustee in April 2006 was the be­gin­ning of a process to “op­er­a­tionalise” the trust so that it can de­liver on its ob­jec­tives.

Asked why it had taken 15 years for the trust to ful­fil its ob­jec­tives of dis­tribut­ing wealth to black peo­ple, Tsele says the trust’s vi­sion was to build re­sources and that’s why it had kept a low profile all th­ese years. “We had to make re­sources avail­able be­fore we could dis­trib­ute them,” says Tsele.

He says the orig­i­nal trust deed is be­ing re­vised to al­low the trust to con­form to SA’s pre­vail­ing eco­nomic cli­mate and in­clude or­gan­i­sa­tions and com­mu­ni­ties that may not have ex­isted at its for­ma­tion.

Hold­ing the purse. Molefe Tsele

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