SA’s own ‘Gup­tas’: Danny and Je­han Mackay?

The Star Early Edition - - OPINION&ANALYSIS - Adri Senekal De Wet

THE GUP­TAS did South Africa a big favour. In ret­ro­spect, they could turn out to be South Africa’s saviours! The leak­ing of e-mails between them and cer­tain gov­ern­ment of­fi­cials opened up a Pan­dora’s Box of dodgy deals, cosy col­lu­sion and cor­rupt deal­ings. Busi­ness Re­port is de­ter­mined to high­light and ex­pose large com­pa­nies and multi­na­tion­als that are re­ceiv­ing gov­ern­ment con­tracts.

A much more dan­ger­ous state cap­ture fol­lowed. Last week’s news of shock­ing al­leged cor­po­rate cor­rup­tion trans­ac­tions im­pli­cat­ing multi­bil­lion multi­na­tional com­pa­nies such as SAP, ABB, EOH and many others to be in­ves­ti­gated fur­ther by Busi­ness Re­port dur­ing the next few days, make the Gupta story look like a kinder­garten tea party.

Busi­ness Re­port did fur­ther re­search on an am­ab­hun­gahne in­ves­tiga­tive re­port pub­lished last month on our own “Gupta’s”: Fa­ther and son: share­hold­ers in EOH (direc­tor Danny) and son Je­han MacKay, that might “de­throne” Atul, AJAY and Ra­Jesh Gupta as South Africa’s most no­to­ri­ous al­leged prac­ti­tion­ers of state cap­ture.

Danny MacKay’s me­te­oric rise as stel­lar busi­ness net­worker be­gan when he sold his com­par­a­tively in­signif­i­cant in­for­ma­tion tech­nol­ogy com­pany to EOH a few years ago. Per­haps he was a good en­tre­pre­neur or per­haps not. This set in mo­tion a most ex­tra­or­di­nary se­quence of events.

Danny was given a seat on EOH’s board and Je­han, his son, was ap­pointed as an EOH ex­ec­u­tive. The Mack­ays took a 5 per­cent stake in EOH. Je­han Mackay’s job was to get EOH more gov­ern­ment con­tracts, a job he ful­filled be­yond the wildest dreams of EOH and the Mack­ays. They did so well, they could af­ford lux­u­ri­ous At­lantic Seaboard and Sand­hurst homes, each worth between R65 mil­lion and R111 mil­lion.

Daz­zling life­style

Ac­cord­ing to an ar­ti­cle pub­lished by in­ves­tiga­tive jour­nal­ists amaBhun­gane, the most ex­pen­sive of their prop­er­ties is known as “The Pen­tagon”. The de­signer man­sion has un­beat­able views of Cape Town’s At­lantic Ocean and the Twelve Apos­tles, and the Mack­ays claim that they can rent it out over the fes­tive sea­son for R150 000 a day!

As if these dis­plays of uber-con­spic­u­ous con­sump­tion are not enough, Je­han was al­legedly able to drop tens of mil­lions on a blaz­ing red Fer­rari re­put­edly the most ex­pen­sive ever bought in the coun­try to date. This daz­zling life­style was aug­mented by his mar­riage to South African so­cialite supreme Sarah Langa-Heaton.

Such op­u­lence was too good not to share with Danny and Je­han Mack­ays highly placed gov­ern­ment con­nec­tions, such as be­lea­guered so­cial devel­op­ment min­is­ter Batha­bile Dlamini where EOH re­ceived a R300m con­tract from the depart­ment.

It has to be asked whether EOH’s largesse in re­ward­ing the Mack­ays knew any lim­its. Ac­cord­ing to EOH , they have the high­est broad-based black eco­nomic em­pow­er­ment rat­ing (BR stud­ied the share­holder list and are puz­zled by this statement since there BEE share­hold­ing seems small - but I will fol­low up with the com­pany to un­der­stand this bet­ter) and earned R12.7bil­lion last year.

Busi­ness Re­port is­sues a chal­lenge to EOH and the Mack­ays: If your trans­ac­tions are squeaky clean, open your books for a full au­dit, dis­close all gov­ern­ment con­tracts and dis­close your de­liv­ery to gov­ern­ment against pay­ment of these con­tracts. In­di­cate if you have di­rectly or in­di­rectly paid any gov­ern­ment min­is­ters or of­fi­cials or peo­ple in­volved in mak­ing these de­ci­sions for IT con­tracts and out­sourc­ing. This should not be a prob­lem as you were quoted as say­ing “that EOH is an eth­i­cal, rel­e­vant force for good and we strive to play a pos­i­tive role in our so­ci­ety, be­yond nor­mal busi­ness prac­tice”.

The def­i­ni­tion of greed as pro­vided by Wikipedia: “Greed is an ex­treme or ex­ces­sive de­sire for re­sources, es­pe­cially for prop­erty such as money, real es­tate, or other sym­bols of wealth.”

Here we run into two prob­lems: defin­ing ex­ces­sive, and defin­ing wealth, es­pe­cially in terms of hu­man psy­chol­ogy. In stark con­trast, the world com­mem­o­rates Man­dela Day to­mor­row, which is char­ac­terised by kind­ness, jus­tice, gen­eros­ity and al­tru­ism. Which of these no­ble qual­i­ties does cor­po­rate South Africa truly sub­scribe to?

Danny and Je­han MacKay might de­throne Atul, San­jay and Ranesh Gupta as South Africa’s most no­to­ri­ous al­leged prac­ti­tion­ers of state cap­ture.


Busi­ness Re­port is­sues a chal­lenge to EOH and the Mack­ays: If your trans­ac­tions are squeaky clean, open your books for a full au­dit.

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