Col­lars and ties mask the real WMC

Only mass civil ac­tion will hound this rogues’ gallery of cor­po­rate crooks out of town

Mail & Guardian - - Business - Pa­trick Bond

Last week a con­cep­tual bar­rier was bro­ken at the Univer­sity of the Wit­wa­ter­srand’s Great Hall: two lead­ing crit­ics of KPMG’s en­abling role in the “Zupta” per­ver­sion of gov­er­nance, Pravin Gord­han and Iraj Abe­dian, made an un­usual case against white monopoly cap­i­tal (though they ob­vi­ously couldn’t name the beast as such).

Gord­han served from 2009 to 2017 as a white monopoly cap­i­tal-com­pli­ant fi­nance min­is­ter. But given how deeply rooted he now de­scribes the cul­ture of cor­rup­tion, the so­lu­tion isn’t self-mo­ti­vated in­ter­nal re­form.

In­stead, he con­cluded, mass ac­tion is re­quired against big cap­i­tal and paras­tatals, per­haps to the bit­ter end: the fate Bell Pot­tinger just suf­fered.

Protest against cor­po­rate in­jus­tice re­mains one of South Africa’s great­est strengths, the World Eco­nomic Fo­rum in­di­rectly ac­knowl­edged in last week’s Global Com­pet­i­tive­ness Re­port. Since 2012, our work­ers have been con­sid­ered the world’s most con­fronta­tional in the Swiss-based fo­rum’s sur­vey of 14 000 ex­ec­u­tives.

On the other side of the class strug­gle, re­call that PwC reg­u­larly names the Sand­ton elite as the world’s most prone to cor­rup­tion — es­pe­cially pro­cure­ment fraud, money-laun­der­ing, as­set mis­ap­pro­pri­a­tion and bribery— and that 80% of our cor­po­rate man­agers “do crime”.

Be­fore leav­ing his top trea­sury job af­ter death threats ear­lier this year, Ken­neth Brown es­ti­mated that more than a third of the gov­ern­ment’s R600-bil­lion an­nual pro­cure­ment bud­get is lost to cor­po­rate theft.

As a re­sult, the In­ter­na­tional Mone­tary Fund re­ports, South African firms now claim av­er­age prof­its among the top five of all ma­jor economies, and the World Bank ac­knowl­edges that the high­estin­come 1% dou­bled their con­sump­tion of our na­tional pie from 10% to 12% in the 1990-1994 pe­riod to 18% to 20% since 2008.

So, are cor­rup­tion and in­equal­ity hard-wired into South African cap­i­tal­ism?

Gord­han ex­plained: “There’s a par­tic­u­lar cul­ture in the dom­i­nant part of busi­ness in South Africa, or some sec­tions of that busi­ness, that we’ve in­her­ited from our past, in the sanc­tions-bust­ing era. El­e­ments of that DNA are still per­sist­ing, 23 years later.”

Abe­dian, who re­cently quit in­sur­ance com­pany Mu­nich Re’s lo­cal board be­cause of its KPMG con­tracts, con­firmed: “There is an em­bed­ded cul­ture where na­tional re­sources are for the ben­e­fit of the rich … What we should be do­ing first is look­ing at the ac­tions of those who sit on boards of in­sur­ance com­pa­nies‚ banks and in­vest­ment com­pa­nies.”

In con­trast to the no-holds-barred truth-telling by Gord­han and Abe­dian, oth­ers re­tain an ei­ther/or Gupta/white monopoly cap­i­tal bias.

As so­cial critic Jonny Stein­berg com­plained in Busi­ness Day last week, de­bates he is hav­ing with (pro-Zuma) in­ter­vie­wees are frus­trat­ing: “It seems that we be­lieve what we be­lieve; any new ev­i­dence sim­ply fills the con­tours of the story we are al­ready telling. Mine is that an un­holy al­liance of politi­cians and bu­reau­crats in hock to a rich fam­ily has hi­jacked pub­lic in­sti­tu­tions. Theirs is that global cor­po­ra­tions have stolen South Africa.”

Both po­si­tions are cor­rect. South Africans from all sorts of back­grounds are ex­press­ing hos­til­ity against sev­eral firms link­ing the Gup­tas and white monopoly cap­i­tal: spin-doc­tors Bell Pot­tinger, ac­coun­tants KPMG, con­sul­tants McKin­sey and two Ger­man soft­ware firms.

Such healthy ha­tred is by no means new. Since the ori­gins of white­set­tler prof­i­teer­ing be­gan with the Dutch East In­dia Com­pany in­va­sion in 1652, later am­pli­fied by the likes of Ce­cil Rhodes and Ernest Op­pen­heimer’s An­glo Amer­i­can Cor­po­ra­tion, re­sis­tance arose from grass-roots, labour and na­tion­al­ist (both Boer and black) ac­tivists. Mostly, the tar­gets of these protests have rep­re­sented malev­o­lent greed and of­ten out­right theft. They were:

cor­po­ra­tions and banks that ig­nored anti-apartheid sanc­tions called ini­tially by Al­bert Luthuli;

de­nied ac­cess to Aids medicines, un­til the Treat­ment Ac­tion Cam­paign re­moved their monopoly patents (rais­ing av­er­age life ex­pectancy from 52 in 2004 to 64 to­day);

plun­der­ers, in­clud­ing mu­nic­i­pal wa­ter firms (Suez, Bi­wa­ter and Ve­o­lia) and Gaut­eng’s high­way e-toll man­agers (Kap­sch Traf­ficCom), which were pushed back by unions, town­ship ac­tivists and the Or­gan­i­sa­tion Un­do­ing Tax Abuse;

2010 World Cup ran into lo­cal protests;

and cell­phone com­pa­nies, and bankers fid­dling the cur­rency — all un­der fire from the Com­pe­ti­tion Com­mis­sion, in turn fu­elled by so­cial out­rage;

and il­licit fi­nan­cial out­flows, fought against valiantly by min­ing union Amcu;

roles — as apartheid lender (Ju­bilee 2000 and Khu­lumani de­manded repa­ra­tions), Lon­min in­vestor (taken to task by Marikana grass-roots fem­i­nists and the Wits Cen­tre for Ap­plied Le­gal Stud­ies), pri­mary cred­i­tor for Eskom’s cor­rup­tion-rid­dled Medupi power plant (hauled over the coals by Lepha­lale crit­ics and Earth­life Africa) and lead owner of Net1-CPS, the so­cial-grant dis­burser that il­le­git­i­mately debit-or­dered mil­lions of poor peo­ple (un­til Black Sash forced its chief ex­ec­u­tive out this year);

agen­cies (Stan­dard & Poor’s, Fitch and Moody’s) which, since 1994, have state-cap­tured the trea­sury, thus com­pelling cut­backs in so­cial in­fra­struc­ture and higher-ed­u­ca­tion spend­ing in the world’s most un­equal coun­try — they were fiercely con­tested (al­beit in­di­rectly) by myr­iad ser­vice de­liv­ery protests and #FeesMustFall; and

along with their al­lies in eth­i­cally chal­lenged Bri­tish, United States and Ger­man cor­po­ra­tions, are now for­ever de­spised and brand-de­graded.

Self-cor­rect­ing mech­a­nisms ap­pear bro­ken. The World Bank’s in­spec­tion panel is tooth­less and, if South Africa’s In­de­pen­dent Reg­u­la­tory Board for Au­di­tors be­lat­edly finds KPMG guilty the max­i­mum penalty is R250000, small change given the fees it has raked in from its “con­sul­tancy ser­vices”.

In­stead, calls for the cor­po­rate death sen­tence ring out. Daily Mav­er­ick colum­nist Richard Po­plak ad­vises: “We need to go af­ter the likes of KPMG and Bell Pot­tinger, and bury them — not just be­cause they’re com­plicit in Zuma’s state cap­ture project, but be­cause they’re shitty in­sti­tu­tions that do shitty work and they de­serve to die.”

Wits School of Gov­er­nance direc­tor David Ever­att warned these firms on The Con­ver­sa­tion: “South Africans will hold them ac­count­able or, if nec­es­sary, break them.”

Af­ter ap­plaud­ing last Wed­nes­day’s anti-cor­rup­tion marches by labour and com­mu­nists, Gord­han told the Wits au­di­ence: “While de­bates like these are im­por­tant, in our po­lit­i­cal cul­ture it’s mass ac­tion that even­tu­ally counts. It’s the in­volve­ment of peo­ple who are will­ing to put some ef­fort into bring­ing about changes that ac­tu­ally makes a dif­fer­ence.”

“We should be look­ing at those who sit on boards of in­sur­ance com­pa­nies, banks and in­sur­ers”

Big­ger pic­ture: The con­ver­sa­tion on white monopoly cap­i­tal is be­ing ex­tended to in­clude cor­rup­tion, greed, col­lu­sive be­hav­iour, labour ex­ploita­tion and big busi­ness in gen­eral. Photo: Paul Botes

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