Speaking about speaking out -- or not
Business leaders weigh duty to respond to political upheaval
SYGNIA CEO Magda Wierzycka is not getting any love letters from Net1 boss Serge Belamant, after she recently exposed his group’s predatory lending to social grantees. And her fearless streak has won her plenty of other ardent non-admirers: notably President Jacob Zuma and his allies, plus her rivals in the asset management industry, whose juicy management fees she both attacks and undercuts.
South Africa’s richest woman, worth R1.5-billion according to the latest Sunday Times Rich List, has no time for the tacit vow of often-expedient silence that binds many of South Africa’s corporate leaders.
She is part of a small but growing group of voluble dissidents, with Reuel Khoza and Sipho Pityana leading the charge. And Wierzycka is horrified by last week’s cabinet reshuffle and the junk status it has triggered.
“The lack of international capital is what brought down communist countries, it’s what ultimately brought down the National Party,” she said this week.
“Nothing else. So knowing that, and the fact we’re at the cusp of a similar situation in South Africa, I don’t understand why business leaders are not speaking out.
“I’ve seen the statements from some organisations, which are all conciliatory. And there’s no time for conciliation. We’ve just been downgraded. Money is already flowing out, and more will flow. The international community is watching. We have a little bit of breathing space before we get a complete tsunami, at which stage it will be too late.
“If we start entering into nuclear contracts — I believe we are on the cusp of it, if they’re not already signed — that will commit the country to years of expenditure, which will be diverted away from everything else, most importantly the provision of basic services. And try fighting the Russians in court about whether a legitimate president’s signature is valid.”
Wierzycka is an unusually left-leaning tycoon, but she has no time for Zuma apologists’ rhetoric about white monopoly capital: “It’s just a smoke screen to distract people’s attention. And Zuma is almost a sideshow. Frankly if it was me and if I had the power, I would just say to him: ‘How much? And leave. Here is amnesty. Here is the lump sum. Leave this country alone so we can actually get on with tackling the real issues.’
“How much he gets is irrelevant in the macro scheme of things. Unfortunately his grip on power at the moment is such that he can cause decades of economic damage to this country with a few strokes of his pen.”
By not attacking the government for its graft, big capital has traditionally won an unspoken immunity from attack for its own profiteering sins. But with the government’s narrative taking a sharply anti-capitalist turn, however cynical the motive, that unholy deal is beginning to expire. Therefore, Wierzycka argued, real and fair redistribution must happen — and pronto.
“We cannot have a thriving economy with the level of inequality that we have,” she said. “I want to make a fair amount of money, but I don’t need to make silly money. What has not worked is the current redistribution policies, which have benefited a few at the expense of the many. South Africa is not unique in this, and it’s not a black-and-white issue. Look at Russia and other Eastern European countries, where very similar situations have happened in political transitions.
“The first movement are the liberators, the ethical fighters for freedom, and the next wave are the commercial opportunists. And it’s only once the opportunists are out of the way that some semblance of a proper political system emerges.”
Having escaped from Poland with her family in the early 1980s as a 13-year-old, she knows about economic collapse. Her parents were doctors in the Krakow coal belt, and when the country ran out of food, the family fled under cover of night, on foot, across the border and found their way to a refugee camp in Vienna. “The guy in the bunk bed above me had walked from the Ukraine, so his feet were totally gangrenous. I still remember the smell.”
Sniffing cheap skills, the apartheid government sent recruiters to set up a stall at the refugee camp, and the Wierzycka doctors duly arrived in Pretoria “with three children, three suitcases and a grandmother”, and took low-paying posts at a military hospital.
Wierzycka studied actuarial science, the only fully funded course she could find, before proving her mettle in asset management at Southern Life, Alexander Forbes, Coronation and African Harvest. When she started Sygnia, she pioneered a mix of index tracking and active management, with low fees and innovative systems setting the firm apart. Sygnia’s rise is a vindication of its honest business ethic, she believes.
“Right now what you’re seeing is the sad face of capitalism. CEOs of listed companies are professional employees: they have vested commercial interests, with bonus pools to think about. They will not speak out about what they believe in. We need them to stop hiding behind Business Leadership South Africa, or Asisa [the Association for Savings and Investment South Africa], or the CEO Initiative. It’s equivalent to what Cyril Ramaphosa said, after long verbiage about his concerns: ‘We look forward to working with the new administration [of the Finance Ministry].’ Seriously? Seriously? They must be flipping kidding me.”
If it was me I would just say to Zuma: ‘How much? Leave. Here is amnesty’ His feet were totally gangrenous. I still remember the smell
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