The ANC and its in­sa­tiable lust for money

Rul­ing party isn’t the Gov­ern­ment or the State

Finweek English Edition - - Openers - BY STEPHEN MUL­HOL­LAND stephenm@fin­

COR­PO­RATE GOV­ER­NANCE IS, quite un­der­stand­ably, now a hot topic. How ex­ec­u­tives deal with the money they’re man­ag­ing for share­hold­ers – best known as OPM, or Other Peo­ple’s Money – cap­tures our at­ten­tion, as ev­i­denced in the great Keb­ble shenani­gans and in the mat­ter of Imvume Man­age­ment, which re­ceived R15m of tax­pay­ers’ money in du­bi­ous cir­cum­stances from the State oil com­pany PetroSA.

As we all know, R11m of that money – which, it can be ar­gued, was ei­ther filched from PetroSA or dis­trib­uted by its ex­ec­u­tives in a crim­i­nally neg­li­gent man­ner – ended up in the cof­fers of the African Na­tional Congress.

Now the ANC, no mat­ter what it per­ceives it­self to be, isn’t the Gov­ern­ment, it’s not the State: it’s merely a po­lit­i­cal party that hap­pens at the mo­ment to have a ma­jor­ity in Par­lia­ment and, there­fore, ap­points the State Pres­i­dent, who then ap­points ev­ery­one else – down, it seems, to the Benoni dog­catcher.

What’s in­trigu­ing about the ANC is its in­sa­tiable ap­petite for money. It has, over the years, ob­tained lit­er­ally hun­dreds of mil­lions, if not bil­lions, from, for ex­am­ple, the Arab na­tions.

Let no one for a mo­ment sug­gest that, in or­der to en­sure that the ANC re­tains the good­will of its off­shore fi­nanciers, that our for­eign pol­icy pur­sues those bizarre trails it cur­rently does in which it sug­gests, for ex­am­ple, that while hu­man rights abuses in the old SA mer­ited the at­ten­tion of the Se­cu­rity Coun­cil, sim­i­lar op­pres­sion in Myan­mar does not.

Also, would it be a great sur­prise to dis­cover that Libya and Iran are reg­u­lar and gen­er­ous bene­fac­tors of our rul­ing party while that would in no way, of course, be linked to our defence of Iran’s nu­clear am­bi­tions in world coun­cils? Of course not.

It may sur­prise some among us, to use the words of our Pres­i­dent, that all this brings me to the is­sue of cor­po­rate gov­er­nance on a crim­i­nal level in the case be­ing brought in Chicago by the US gov­ern­ment against my for­mer em­ployer, Con­rad Black – or Lord Black of Crosshar­bour, as he’s also known.

His ti­tle takes its name from the Lon­don rail stop of Crosshar­bour, which is the next one to Ca­nary Wharf, where the Daily Tele­graph news­pa­per, once the jewel in Black’s crown, was pre­vi­ously lo­cated.

There’s a sim­i­lar­ity be­tween the way the ANC re­gards it­self as the State and en­ti­tled to funds from wher­ever it can ex­tort them us­ing the State as a deus ex machina in one way or an­other and what Black is ac­cused of by the US gov­ern­ment.

It can be ar­gued that the fidu­ciary re­spon­si­bil­ity ex­ec­u­tives and direc­tors owe to share­hold­ers par­al­lels in a way the re­spon­si­bil­ity of a rul­ing party to keep its af­fairs and those of Gov­ern­ment rigidly sep­a­rate.

That, es­sen­tially, is what Black is be­ing charged with: tak­ing funds from the com­pany in a cir­cuitous way when such funds prop­erly be­longed to all its share­hold­ers.

Sim­i­larly, the ANC in the Imvume mat­ter has taken funds be­long­ing to tax­pay­ers (share­hold­ers in this sense) and in the Keb­ble mat­ter it has taken funds be­long­ing to share­hold­ers, which funds have been stolen from those share­hold­ers.

In ad­di­tion, it’s dis­turb­ing how of­ten the names of ANC lu­mi­nar­ies pop up in mat­ters fi­nan­cial in which the Gov­ern­ment de­cides the out­come. The Lotto, now in ad­min­is­tra­tive tur­moil, is only one ex­am­ple. The defence area is an­other, as are the af­fairs of Chan­cel­lor House, that shad­owy ANC money front.

Such is the ANC’s lust for money that it wouldn’t sur­prise any de­tached ob­server if it emerged that our for­eign poli­cies are for sale.

Be all that as it may, let’s re­turn to the mat­ter of Black and his share­hold­ers’ funds. Far be it from me to abridge what­ever the Amer­i­cans use as a sub ju­dice rule – that an­cient and abused no­tion that no­body may com­ment on the mer­its or oth­er­wise of a mat­ter once it’s be­fore the courts.

How­ever, it’s clear that what the US gov- ern­ment is ac­cus­ing Black et al of is tak­ing money in the shape of what’s known as a “non-com­pete pay­ment” fol­low­ing the sale of some of the group’s news­pa­pers when those non-com­pete pay­ments should have gone to the com­pany’s share­hold­ers.

Imag­ine, for ex­am­ple, that un­der the late An­ton Ru­pert’s chair­man­ship the Rem­brandt Group had sold, say, a cig­a­rette brand to a com­pany in an­other coun­try. The buyer in that coun­try doesn’t want Rem­brandt en­ter­ing its mar­ket and al­lo­cates a por­tion of the pro­ceeds of the sale to a non-com­pete pay­ment, in terms of which Rem­brandt agrees not to mar­ket cig­a­rettes in that coun­try.

Let’s as­sume that this non-com­pete pay­ment goes not to the com­pany but to An­ton Ru­pert him­self. Of course, Ru­pert con­trolled

It wouldn’t sur­prise any de­tached ob­server if it emerged that our for­eign poli­cies are for sale.

the Rem­brandt Group but there were out­side share­hold­ers.

In the Black mat­ter, the US gov­ern­ment says that Black, and three of his ex­ec­u­tives, im­prop­erly took those non-com­pete – or re­straint of trade – pay­ments. On Black’s side it can be ar­gued that it would be in the in­ter­ests of the buy­ers of the news­pa­pers his com­pany was sell­ing to block Black him­self, rather than his com­pany, from com­pet­ing in those mar­kets.

Noth­ing was to stop Black, hav­ing sold the news­pa­pers, to en­ter those mar­kets in his per­sonal ca­pac­ity, which would ob­vi­ously not be in the in­ter­est of the buy­ers. On the other hand, some of those buy­ers have tes­ti­fied in court that they paid the non-com­pete fees – re­luc­tantly – at the re­quest of the Black group to the com­pany through which Black and his part­ners con­trolled Hollinger In­cor­po­rated.

Of course, all will be re­vealed as the trial pro­gresses. Let’s trust that the same process will fol­low in SA and that the cor­po­rate gov­er­nance stan­dards to which the private sec­tor is held are used to mea­sure the ethics of the ANC in its re­morse­less pur­suit of money.

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