Business must clean up its own act, says Remgro’s Jannie Durand
Remgro’s Durand says not only politicians should be targeted
Jannie Durand, CEO of investment holding company Remgro, says he wants to see Markus Jooste and other high-profile business people implicated in corruption arrested and charged as soon as possible.
Arrests by the National Prosecuting Authority (NPA) have given him hope “that things are going in the right direction”, he says.
“The only concern I have is that I want to see other high-profile people being arrested, not just on the political side from government. People in the business environment must also go to jail.”
He says he can’t understand why Jooste, the former CEO of Steinhoff whose resignation in December 2017 triggered its collapse, hasn’t been arrested yet.
“How much money has been lost in the Steinhoff debacle and there have been no arrests at all?” He’d like to see arrests happening “very quickly”, he says.
“We as business people are pointing fingers at government corruption, but we should look at our own environment as well, and the things that have happened there.
“We know about Steinhoff, we know about Tongaat. I would love to see some arrests happening there, so that we can clean our own slate as business as well.”
He says he can’t imagine why Jooste is still a free man unless it’s the complexity of the Steinhoff case.
“I don’t know. I just hope they can put a case together and we can get some action sooner rather than later.”
He says it’s of utmost importance that action is seen to be taken swiftly in cases involving the private sector.
“If people have confidence in the country’s ability and willingness to act against corruption in both public and private spheres, foreign capital might flow into the country and foreign direct investment.
“It’s about sending a message that the government and NPA in this country will root out corruption in all spheres. If you don’t have that confidence, no logical foreign investor will invest in this country.
“From confidence flows investment, from investment flows growth, from growth flows employment. But it starts with confidence. If you don’t trust that people are going to do the right thing you’re not going to give them money.”
He says there is a case for the private sector to second or sponsor top forensic investigative people to help law enforcement agencies such as the NPA in more complicated commercial crimes.
“I would love to see that, because the sooner we can deal with these cases the better for all of us.
“It would give the country hope and although hope is not a strategy, no country can succeed without it.”
He says President Cyril Ramaphosa’s economic recovery plan lacks the kind of practical detail about “exactly what are the next three or four things you will do and when” that would have given him more hope.
“You can have the best-sounding plans. They count for nothing until they’re executed.”
He would like to have seen “timelines, deliverables, what they want to do when, so that you can hold the government to account and compare what they’ve done with what they promised. My problem is not the plan, it’s the execution. That’s where we’re falling apart.
“You need an effective, efficient state to run the economy.”
While he’s encouraged that Ramaphosa acknowledged this in his recovery plan, “we’re not seeing it”, he says. “And with a bloated, inefficient state you don’t get execution.”
Durand says he is not too concerned about the expropriation without compensation bill published recently.
Although acknowledging that he’s only read summaries of the bill so far, “it seems there are enough checks and balances in the system, it won’t just be a free-for-all”.
He says it’s hard to say if it will deter investors, “but at least now they can see what it’s all about, there’s a bit of certainty. If you’ve got certainty then you can deal with it, you can put it into your planning. What this bill does is it gives clarity, and hopefully that will encourage foreign investment”.
What he does find “a bit worrying” are clear signs that there has been “some intervention” in Tito Mboweni’s role and influence as finance minister.
The clearest indication of this for him is the decision to bail out South African Airways in spite of Mboweni’s strong opposition. The SAA decision is “clearly a big worry”, he says.
“That thing should have been closed down a long time ago. Imagine how many schools you could have built with themoney already spent on it, let alone the additional R10bn they nowwant to spend. I don’t know why it is such a holy cow. It doesn’t make any sense at all.”
The real damage is the message it sends to the investment community and ratings agencies that the government is not serious about reducing its debt.
Another sign of Mboweni’s diminishing influence, he believes, is the replacement in the economic recovery plan of the export-led growth the finance minister backed with import substitution and localisation.
“I’m a bit conflicted about that because I would love to have more localisation of the chicken and sugar industries Remgro is involved in, as long as they’re globally competitive. And they are. They’re among the lowest-cost producers in the world but they’ve been hit hard by predatory imports.”
He says he supports localisation if it is internationally competitive. “Localisation only works if you’re internationally competitive. That is key. Where we invest we are internationally competitive.”
The only way to achieve the efficient, effective state that Ramaphosa acknowledges is necessary to execute the economic recovery plan is to cut red tape, relax labour laws and create a business-friendly environment, he says.
“There have been a lot of promises in that regard but I haven’t seen much of that happening. There is still way too much red tape.”
Durand has long called on business to be more outspoken. But to have credibility it needs to clean up its act, he says.
“That’s why, from a business point of view, some people must take accountability for their actions, and that hasn’t happened.
“If you want to be outspoken you need to speak from the high ground.”
We know about Steinhoff, we know about Tongaat. I would love to see some arrests
Jannie Durand Remgro CEO