EDINBURGH — South Africa has a reputation for staggeringly high crime rates and corruption. While politicians have been highlighted as the main culprits, the nasty truth is that dishonesty and thievery run deep and wide across society. In business, the tentacles reach the highest echelons. The Steinhoff scandal highlights that captains of industry like shamed Steinhoff boss Markus Jooste have as much to answer for as state capture puppet master Atul Gupta and brothers when it comes to making huge swathes of South Africa poorer while they feather their own nests. In this piece, Errol Horwitz underscores that journalists tend to paint corporate sinners as making mistakes while politicians and their friends are nasty crooks. It’s time to change that narrative, he argues. Let’s prosecute and punish Steinhoff executives and the Gupta family and associates for inflicting widespread misery through their nefarious deeds, he argues. – Jackie Cameron
Lynne Brown Minister of Public Enterprises must have had the lyrics in mind of “anything you can do, I can do better” from the movie Annie Get Your Gun when she recently addressed a special general meeting of Eskom.
The Steinhoff off-balance sheet, insider trading fiasco presented Brown with the opportunity to exultantly pierce the private sector’s veil of self-righteousness.
I am no fan of Brown. Her gross lack of oversight of SOEs earned her a permanent seat at the Public Sector Table of Incompetents by massively contributing to South Africa’s failing economy. But what she had to say to the new Eskom board was tellingly accurate as to the double standard in play between private and public sector boards: “Unlike those who serve on the boards of private companies, such as Steinhoff, [you] will be regarded with suspicion and mistrust. They make ‘accounting mistakes’, while you are susceptible to corruption, state capture, greed, and malice”.
Brown was referring to South Africa’s “holier than thou” smug corporate elite. The sanctimonious smugness that was eviscerated by a corrupt Nasper curtain-raiser in the MultiChoice matter, followed by the main event – the Steinhoff debacle, the biggest fraud in the country’s history. Tom Eaton in a recent piece succinctly posited the demise of the middle class and media’s refrain of tending “to go easy on dirty corporates. White crooks, they claim, make ‘mistakes’, while black ones are corrupt thieves”. Not so, as white crooks can do it better than black corrupt thieves. Far better, according to Eaton, as the Steinhoff debacle, in a 48 hour period, losses amounted to a staggering R100-billion, in excess of amounts the Guptas are accused of stealing over a decade.
If anyone thinks the Steinhoff fraud is a new business sector phenomenon – an aberration and nothing more – think again. Far from guiltless and irreproachable. One merely has to look back on its unsavory partnership with the apartheid regime in sanctions-busting. Dressed in a cloak of respectability big business surreptitiously aligned itself with the apartheid regime by clandestinely supporting and profiting from the regime’s oppressive hold over the country.
The Steinhoff debacle was the equivalent of an exploding incendiary device. Exploding the perception that the private sector could do no wrong, and the myth that public sector corruption was the cause of the country’s economic ills. Big business has been in the chorus line accusing the ANC government in facilitating public sector corruption. The stench of hypocrisy takes one’s breath away.
Minister Brown wasted little time in expressing her delight for the Steinhoff blowback. At the very least it allowed her to divert attention away from the SOE’s under her wing. What she conveniently ignored was the double whammy effect of the Steinhoff fraud on top of billions of rand criminally misappropriated from SOEs while she was asleep at her ministerial wheel.
Every segment of the economy will likely be impacted because of the witchery of Steinhoff’s corporate elite. Forgotten in the blowback are 1.2 million government employees who are invested in Steinhoff through the Government Employees Pension Fund. At last count, they are R12-billion poorer.
The Steinhoff scandal is a wake-up call that must not be swept under the catch-all rug of incompetence or some other benign reason. Steinhoff’s corporate elite must be added to those in the public sector who are long overdue for criminal prosecution.
As for Brown retaining her portfolio, Ramaphosa’s new ANC leadership role, and presumptively future president of South Africa will afford him the opportunity to purge presently serving corrupt, incompetent cabinet officials. A possibility – yes, if Ramaphosa can locate his long-lost backbone. Time will tell…
- Errol Horwitz was a political activist in the 60s, and returned to South Africa a few years ago, after residing abroad for more than three decades.
By Errol Horwitz/BizNews