State capture, apartheid style
A new book by Hennie van Vuuren delves into the murky dealings between the apartheid government, local businessmen, foreign arms dealers and unscrupulous Swiss bankers.
1985. A South African Airways Boeing has just touched down in Switzerland. It’s filled with gold.
The apartheid government is facing a significant debt crisis, exacerbated by President P.W. Botha’s recent Rubicon speech. It owes a lot of foreign banks money it can’t repay. Government debt has increased by 50% in the first half of the 1980s and the banks are clamouring for their money.
Director-general of the Treasury at the time, Chris Stals, estimates that the government has enough US dollars to survive a few weeks.
A small Swiss bank gets wind of the SAA Boeing and attempts to confiscate the plane and its precious cargo as payment against the debt owed to it by the South African government.
“During the course of the day Dr Senn of UBS, who was a great friend of SA, bought the bank,” recalls former finance minister Barend du Plessis. “He never told me the name of the bank as it was confidential at the time – and he fired the very brave CEO.”
Talk about friends having your back
The chief executive of financial services firm UBS bought a bank to save the apartheid state the embarrassment of having a plane full of gold bullion confiscated on a Swiss runway. As Du Plessis says, Nikolaus Senn was a “great” friend of the previous regime. (See box.)
This little anecdote from academic and civil society activist Hennie van Vuuren’s new book, Apartheid Guns and Money, is very instructive on the symbiotic relationship between bankers and the apartheid state, which he details at length in his 610-page tome.
Profiting from apartheid
Between 1968 and 1990 Switzerland was at the centre of the world gold market due to its relationship with the apartheid state. In some years it purchased or sold up to 80% of South Africa’s gold output.
“Unsurprisingly some of the largest Swiss purchases of gold occurred during some of the apartheid regime’s most severe crises,” writes Van Vuuren. “The 1976 Soweto uprising, the need for enriched uranium in 1981, the debt rescheduling in 1985 and the liquidity crises in 1983 and 1988.”
As Van Vuuren writes, “there was a fortune to be made in misery”.
Switzerland acted as a base for South African financial operations, with the apartheid government opening a financial consulate in Zurich in 1987, and many South African companies transferring their foreign assets there.
In 1987, Anton Rupert’s Rembrandt established Richemont in the Swiss town Zug, and in 1990 De Beers put its foreign assets in a holding company in Lucerne.
This connection between Swiss bankers, the apartheid state and captains of industry in Corporate SA is vitally important.
As Van Vuuren points out in his book, the private sector has not atoned for its involvement in and gains from apartheid. Its statements before the Truth and Reconciliation Commission were hardly sufficient.
“The industry bosses who, like Johann Rupert were bold enough to appear at the hearings, tended to shift the focus to their humble efforts in opposing apartheid and their corporate charity programmes.”
Between 1968 and 1990 Switzerland was at the centre of the world gold market due to its relationship with the apartheid state.