Business Day

Patel must tackle patronage allegation­s

- CLAIRE BISSEKER ● Bisseker is Financial Mail assistant editor.

Economic developmen­t minister Ebrahim Patel’s star appears to be rising in the government of Cyril Ramaphosa. But the president’s unequivoca­l stance on rooting out corruption is at odds with Patel’s softly-softly approach to what appears to be an entrenched patronage network in the Competitio­n Commission.

Patel looks to have Ramaphosa’s ear, judging from the starring role he was given in co-ordinating the investment summit last month and the fact that the president’s economic recovery plan includes a specific carve-out for the clothing and textile industry —a special interest of Patel’s, who led the Southern African Clothing and Textile Workers’ Union for a decade from 1999 to 2009.

To get growth going, Ramaphosa is relying on a range of interventi­ons. Among them is the idea that lowering barriers to entry through increased competitio­n will stimulate small business growth, especially that of black businesses, helping to transform and grow the economy at the same time.

The main vehicle through which this is to be achieved is Patel’s flagship piece of legislatio­n, the Competitio­n Amendment Bill. It will give new powers to the commission to break up industry concentrat­ion in the interests of stimulatin­g competitio­n and hence growth.

So it couldn’t be more inconvenie­nt that just as parliament is debating the bill, the commission has been exposed by the auditor-general as having run up more than R128m of irregular expenditur­e over the past two years. A significan­t portion of this went to a single private law firm, Ndzabandza­ba Attorneys, headed by Anthony Ndzabandza­ba, a former division head in the commission’s cartels section.

In total, Ndzabandza­ba has raked in R72m in payments from the commission since January 2015. Between then and January 2017, his firm was channelled 31 out of 44 (70%) of the cartel cases outsourced by the commission.

According to Patel, the commission’s explanatio­n for this state of affairs is that the “traditiona­l law firms in Sandton” (read mostly white firms) normally act for the litigants who appear before the commission (read big business) and this leaves only “a small pool” of firms the commission believes are not conflicted.

It is astonishin­g that someone as astute as Patel could lap up the commission’s risible rationale so unquestion­ingly. Pestered on this issue in parliament by DA MP Michael Cardo, Patel in effect told Cardo to back off and not impugn the integrity of an otherwise effective institutio­n over a minor slip-up.

“We have an institutio­n that worked well,” said Patel. “There are some challenges here and there that we must address, but in dealing with those we don’t break down institutio­ns in order to solve little problems that the commission may have or to deal with the issues that [the] auditor-general has raised.”

So, instead of establishi­ng an independen­t inquiry into allegation­s of corruption at the commission, Patel has tried to defuse the issue by appointing a panel to review the effectiven­ess of his entire department as well as the competitio­n authoritie­s, particular­ly insofar as the implementa­tion of the bill is concerned.

In so doing, the panel must address any gap or weakness in the commission’s current governance arrangemen­ts, but Patel stresses that this must be done in ways that constructi­vely build the commission and protect its independen­ce.

However, sweeping the Ndzabandza­ba issue (one of alleged corruption) into a broad panel review of the effectiven­ess of the competitio­n authoritie­s and the department (which’ “He s is fobbing an issue me of off capacity) and smacks of evasion and obfuscatio­n. sweeping a serious matter under the carpet,” says Cardo. “The patronage network involving Ndzabandza­ba Attorneys needs to be dismantled and minister Patel is not helping the cause by burying his head in the sand.”

Patel needs to wake up. Whistle-blowers allege that Nzabandzab­a’s firm is just the tip of a patronage iceberg and, with Cardo on the warpath, the matter is unlikely to end there.

Ramaphosa will be sorely displeased if senior commission officials are ultimately exposed as having benefited from systematis­ed corruption while Patel shielded them to protect his pet project.

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