Colluding builders must answer to all
WALK into the shimmering offices of Murray & Roberts, Wilson Bayly Holmes-Ovcon (WBHO) or a dozen other construction firms, and one word you won’t see emblazoned on their mission statement is “accountability”.
For months, they’ve done the lawyer-dance: avoid admitting anything, pretend you have no idea from which pipe the whistleblower (Stefanutti Stocks’s director Schalk Ackerman) was sucking from. Now, this week, suddenly they all remember what they did, divvying up tenders between themselves, agreeing to “sham tenders”, and ultimately driving up the cost for you and me.
Soccer City, built for R3.4billion? They fiddled the tender. Cape Town’s stadium built for R4.4bn? Ditto.
So, a R1.46-billion fine for R46-billion worth of projects, well that’s just a bargain, isn’t it? Almost worth it, especially if no one ends up with a criminal record, losing their job or being sued.
In a rather bizarre press statement, Cosatu’s Vusumuzi Bhengu said these “ferocious criminals who in midday parade as company CEOs but at night are sickening criminals who plot to milk the state funds … must be arrested and sent to jail for treason”.
Well, Mr Bhengu, the good news is that unlike the DA, Cosatu doesn’t have to just whinge from the sidelines as passive onlookers. The union can be instrumental in how this dirty little episode plays out. They can be responsible for ensuring accountability at these companies.
Take WBHO, which will now pay a fine of R311-million from investors’ money — not from the salaries and bonuses of the people who actually fixed the tenders. At WBHO, the Government Employees Pension Fund holds 14.5% of the shares, Old Mutual holds 4.7% and Sanlam holds 4%.
These aren’t shares that belong to the GEPF, Old Mutual and Sanlam: they belong to individuals who provide the money for these investments. That’s your pension money, being invested.
Equally, Murray & Roberts: the Public Investment Corporation, which invests government employees’ pensions, holds 16% of the company. Allan Gray owns 8% of Murray & Roberts, Coronation holds 7.5% and Old Mutual holds 7.2%.
Union members, outraged members of the public, anyone with an interest in accountability can go to the fund manager who invests their pension, and instruct them to go to the AGM and demand answers from the company.
Questions like, have you fired the people who fiddled tenders? Have you clawed back their bonuses, including from know-nothing CEOs who wrote self-congratulatory notes in the annual report? Did you fire the nonexecutive directors and boards who seemingly noticed nothing?
It’s about time the unions and the public found their proper voice, instead of whingeing shrilly from the sidelines.
Business Day this week oozed misplaced sympathy for these cheats who “scratch for single figure margins”. Really? WBHO’s return on equity last year was 18% — higher than some of the banks, whom we hardly shed a tear for.
What is the argument here? That we shouldn’t mind paying higher taxes for mega-projects like soccer stadiums so we can support crooked companies that submit fiddled tenders? No, that’s tosh. Very basic market economics would ensure that construction companies can do business in South Africa without breaking the law.
That patronising argument is also an insult to the many CEOs and executives who don’t have to break the law, cheat the public and lie about what they’ve done to make a buck. This week’s competition commission settlement is an insult to every one of them.
Worse, it allows misguided idealogues like Cosatu to bunch all CEOs together as inherently corrupt “ferocious criminals”.