Shaky reaction to scandals like Steinhoff
EVEN before the brutal nature of the colonial and apartheid regimes were formally admitted by their leaders and beneficiaries, some politicians were aware that what existed in South Africa before 1994 was not just a travesty, but as the UN declared, “a crime against humanity”.
Yet a great many of these idealists chose to look the other way in the belief that criticism would weaken the fledgling democracy, encourage “revolutionaries” and weaken the bigger fight for reconciliation, reconstruction and development.
Having to choose between upholding what was termed, “common decencies”, forgiveness and endorsing the lesser evil has confronted political activists for past 23 years.
This hoary debate has surfaced particularly in the past seven years, following a spate of corruption scandals that have seriously undermined the credibility of the ANC-led government.
That is why when news of the country’s biggest financial crisis – Steinhoff ’s so-called “accounting irregularities” or possible fraud, as many would have it, broke recently, the mute response of the mainstream media apparently did not feel the shockwave.
Sections of this media didn’t react to the “crime” with the same measure of breathless excitement that it greeted every government corruption scandal or Gupta business transaction because it was aware that this is just the tip of the iceberg.
One news organisation, which carried out a sustained crusade against the Gupta family for leveraging its privileged relationship with President Jacob Zuma and going as far as accusing them of acts of fraud and corruption, turned the proverbial blind eye to the Steinhoff disclosures.
Of course, I am wilfully being vague because I do not have either documents or recordings to substantiate every anecdote.
I am relying almost exclusively on my status as a media insider and the oral evidence of those who have been victims of media bias.
Most journalists are decent individuals, trying to be professional even as they have preferences. A small minority of them are, however, using journalism as a protective shield for their prejudices.
Overnight, one of the world’s largest furniture retailers – a behemoth long associated with quality, reliability and trust – became a symbol of alleged greed, fraud, deception and corruption. Steinhoff and its associated companies stood to lose R280 billion.
At the same time, 130 000 of its employees jobs were put in jeopardy. The implications were far-reaching.
The Public Servant’s Association, representing 1.27 million teachers, health workers, court officials et al, of the Government Employees Pension Fund (GEPF) have their monies managed by the Public Investment Corporation (PIC). Overnight, R12bn of GEPF’s investment with the PIC, and in turn with Steinhoff, was wiped off the Johannesburg Stock Exchange.
The details of Steinhoff’s entrepreneurship and financial crisis – yet to unfold – would be revealing for what they would probably tell us about the reality of white monopoly business in the metros, towns and villages of the Republic.
Politically, however, the issue is far more consequential.
It’s not the first time since 1994 when the ANC infuriated the National Party and the Democratic Alliance by raising awkward questions about corruption by monopoly capital that the country has been directly hit by a money scandal. Corporates may have brushed away allegations of price fixing; cartels or insider trading but that hasn’t insulated them from the charge that they did nothing to prevent their exalted position to be used for disreputable advantage.
When you’re shopping at the supermarket or at the shop at the corner, you expect that the spices you see come from turmeric or chillies and are not adulterated with mealie meal and chemical colouring; that the bread you buy carries the correct weight and is not higher than the price you would expect to pay for a loaf. Increasingly, chances are that you might have been wrong.
The Competitions Commission has found construction companies and bakeries, among other businesses, guilty of price-fixing cartels.
Without doubt, the business ethics of corporates like Steinhoff, not to mention the sneering sense of entitlement of some BEE beneficiaries, have created a large hole in the moral edifice of business and the public sector. But the excuses business and sectors of government are making for the business dealings of Steinhoff seem driven by a shared fear of rocking the economy.
Far from being celebrated as a mildly progressive dispensation concerned with nurturing socio-economic entitlements for the poor and the marginalised, the magnitude of BEE corruption has created a widespread impression that the apparent concern for the poor blacks is a cover for riotous crony capitalism.
This is certain to shape popular perceptions in the run-up to the 2019 election, unless, of course, the ANC is spectacularly successful in shifting the attention of voters away from sleaze in the public sector too.
Like the rotten apples in the political basket, they need to be named and shamed. The investigation by the Department of Trade and Industry; the Companies and Intellectual Property Commission and other law enforcement agencies is a small step in the right direction.
Let’s hope it isn’t derailed.