Who gets paid?
The ANC has already benefited
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