The ANC and its insatiable lust for money
Ruling party isn’t the Government or the State
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.