Ex-AngloGold CEO on corruption – and regrets
Former AngloGold CEO says fight against graft in SA can be won
● As a figure who worked hard behind the scenes to raise business’s voice against corruption in government, Srinivasan Venkatakrishnan, the former CEO of AngloGold Ashanti, feels the fight against the scourge has started a “bit late” but that it could be corrected.
In an interview just days ahead of his August 31 start as CEO of Vedanta Resources, the diversified Indian mining and energy company, Venkatakrishnan said the lessons he’d learnt at the helm of the world’s thirdlargest gold company were invaluable and positioned him to take up the new job.
But while he steered AngloGold through one of its toughest times, and despite failing to convince shareholders to back a plan to separate the company’s international assets from the local ones, creating two separately listed entities, it was the broader role he played outside the company where he made his mark and his strong brand of ethics and values was felt.
He was involved in the Minerals Council SA, then called the Chamber of Mines, and was a director of Business Leadership SA (BLSA).
“Corruption is like cancer. If you don’t catch it early on it spreads very, very quickly. You need to nip it in the bud. That corruption was happening here and was endemic across certain parts,” Venkatakrishnan said, conceding that perhaps the business community had been too slow to speak out and tackle the problem.
“Business is an important voice and it was lost in the wilderness before, and historically it sat on the sidelines, worrying about how speaking up would impact its business. We had to do introspection and see where we were at fault, make corrections and then move forward. This was all important for us. It was an absolutely critical moment where potentially SA was about to jump over a cliff and it had to be pulled back,” he said.
Preferring to voice his opinions “behind the scenes without fear of retribution and fighting for what I believed was just and correct”, Venkatakrishnan helped mobilise BLSA in taking a stance against corruption, joining a number of SA’s senior executives in publicly opposing the rot festering and flourishing during the presidency of Jacob Zuma.
Asked if corruption had been caught early
Corruption is like cancer. If you don’t catch it early on it spreads very, very quickly Srinivasan Venkatakrishnan Former CEO of AngloGold Ashanti
enough, he said: “Honestly, no, but better late than never. It should never happen in the first place. Here, it was probably caught a bit later but before it was too late.
“It can be reversed. It won’t be a walk in the park, but if there’s a will and co-operation of people saying, ‘not another time. We’ve nearly lost the country once and we won’t make that mistake again’.”
Another driving factor in his role in raising business’s voice against corruption was the fact that one family — the Gupta family, with its links to powerful politicians like Zuma and others who were milking stateowned companies — was tarnishing the image of 1.3-billion Indians, he said. Venkatakrishnan was born and educated in India.
He had the highest praise for AngloGold chairman Sipho Pityana, who was easily one of the most fearless and outspoken business leaders about the rottenness of Zuma’s presidency, using public platforms to air his concerns and criticisms.
Although he declined to speak about his role at Vedanta or the mandate given to him by chairman and controlling shareholder Anil Agarwal, Venkatakrishnan spoke openly of his three regrets during his five years as AngloGold’s CEO and eight more as its CFO, as well as lessons learnt that he would apply in the new job for which he’ll be headquartered in London.
Featured at the top of both what Venkatakrishnan learnt and what his key regrets were during his tenure was that AngloGold’s mines, mainly those in SA, were unable to achieve a sustained zero-harm status. “Safety is paramount. It’s not something you compromise on, because a safe mine is a productive mine and all other metrics follow through,” he said.
“We improved our safety numbers at AngloGold, but my big regret is not getting to zero harm. People shouldn’t have to die at mines. I wish we’d done better.”
A second area of regret was that in the early 2000s, when he joined AngloGold after it bought Ashanti Goldfields, where Venkatakrishnan had dealt with a toxic hedge book — essentially sales of gold contracted forward at below spot prices that threatened the viability of the company — he found the same situation at the South African company.
Anglo American, then the majority shareholder in AngloGold, declined to step in and help remove 12-million ounces of gold from the hedge book which were well below spot prices, forcing the company to approach shareholders and lenders to close the positions.
Venkatakrishnan’s predecessor at AngloGold, Mark Cutifani, said in 2010 the company had spent $6bn to close its hedge book, which if unaddressed would have cost it $10bn in lost revenue.
The third regret was the inability to persuade shareholders in September 2014 to split AngloGold, with the South African assets forming the nucleus of a larger metals business. “I wish we’d gone about it differently. I think the asking price was too high because we wanted to get the best from both sides of the split. With hindsight, we could have done it better,” Venkatakrishnan said.
“Having said that, looking at the safety regrets, we were forced to look at ourselves and how to improve. The hedge book, it brought discipline into the company, while September 2014 forced us to develop selfhelp measures and do everything without asking shareholders for a dime.”
Since 2014, AngloGold has reduced its South African assets to just the Mponeng mine, the world’s deepest at 4km below the surface, and a tailings retreatment business, after selling and closing the rest of its assets.
“The intention in September 2014 was to make the South African arm a much bigger entity. Would it have changed the future of the South African gold assets? Probably not,” he said.
Venkatakrishnan left SA with a positive view of the future for the country, despite the noise and the difficult discussions around contentious issues.
“In SA, debate tends to happen in the open. It tends to be loud. And it tends to be very vocal, but ultimately consensus is reached and the country moves forward.”