Asset 4.png


OPINION: State needs to protect black-owned and run companies, not destroy them


PRETORIA – This past week, the Mpati Commission of inquiry got ugly and turned into a mudslinging fest as Bantu Holomisa, the leader of the United Democratic Movement (UDM) squared off with Lebashe Investment and Harith General Partners.

Both companies, which are linked to former Deputy Finance Minister and ex-PIC chairman Jabu Moleketi, are represented by Advocate Danny Berger at the on-going commission of inquiry into allegations of impropriety at the PIC.

Holomisa, although sticking to his guns about there being a conflict of interest between the companies, has conceded that most of his allegations that formed the basis of the establishment of the commission by President Cyril Ramaphosa were based on media reports as opposed to concrete evidence.

During cross-examination, Berger asked Holomisa if he had any evidence to back up the claims that he had made against Lebashe and Harith.

Last month, Holomisa had told the commission that a group of politicians, civil servants, fund managers and businessmen had allegedly turned the PIC into their cash cow. He then named Moleketi, PIC director Sibusisiwe Zulu and businessmen Tshepo Mahloele and Lawrence Mulaudzi as the key players.

Holomisa, although sticking to his guns about there being a conflict of interest between the companies, has conceded that most of his allegations that formed the basis of the establishment of the commission by President Cyril Ramaphosa were based on media reports as opposed to concrete evidence.

This then raises the following questions: should the reputations of established, profitable businesses that employ thousands of people be allowed to be dragged through the mud without the appropriate evidence being presented?

Is it fair for those who make claims to pass the burden of proof to the commission, or to the accused persons or organisations?

In his testimony before retired Judge Lex Mpati, Tshepo Mahloele, the chairman of the group at Lebashe Investment, told the commission that Holomisa’s conjectures and suspicions that HFM is underhandedly engaged in illicit or frivolous investment of PIC funds, for the benefit of an elite cartel within the management team, thus flagrantly risking the life savings of civil service pensioners, are entirely nonsensical.

There is a pattern to this counterproductive modus operandi. Similar allegations were made against AYO Technology Solutions by various parties including PIC officials and state regulatory bodies like the Companies and Intellectual Property Commission (CIPC).

The claims, which threatened thousands of jobs and the company’s reputation, later proved to be baseless when AYO released a solid set of results.

The technology company’s revenue rose 93% from R349m to R675m, according to its unaudited financial statement. AYO employs 7000 people directly and indirectly.

Like AYO, Lebashe and Harith have created close to 6000 employment opportunities. Both companies have explicitly stated that they are not BEE fronts for any white-owned companies. Despite these protestations and attempts to set the record straight, the companies’ names were dragged through the mud. Why and in pursuant of what goal?

Just for fun, or to settle commercial and political scores? Really? At the expense of thousands of mouths to feed? Have we become this inhumane as people?

The exchanges between Lebashe, Harith and Holomisa were painful to watch, with emotions running high, compounded by the hurling of insults to the point where Berger requested Mpati to intervene as he felt Holomisa had insulted him.

Since Lebashe and Harith are both black-owned entities, the back and forth between the groupings and Holomisa reinforced the negative stereotypes associated with the concept of “black on black violence”. This is a term commonly used in the United States to assess crime amongst blacks in inner-city communities.

Despite failing to produce evidence to substantiate his damaging claims, Holomisa continued to insist that it was up to the commission to find evidence of wrong-doing against companies that he himself had implicated. This assertion is laughable if not sad. Only he knows why he was happy to accuse others but chose to pass the buck when requested to prove his claims.

By insisting the commission should be responsible for digging and finding evidence, the UDM leader has essentially tried to absolve himself. He has created a toxic situation where the accuser does not have to prove his allegations. This is nothing more than the laws of the jungle.

It seems Holomisa has a bizarre and logic-defying understanding of the laws of natural justice. Instead of proving his claims, he shifted the responsibility to the same people he had accused of wrong-doing. Really?

This is unacceptable and must never be allowed to pass. If Holomisa’s witch-hunt mentality is given a free pass, it would set a very dangerous precedent where inquiries, established for legitimate purposes, end up becoming a platform for political mudslinging and smear campaigns.

There are a number of black and white-owned companies that have been accused of and implicated in wrong-doing at the commission. Yet, barring a few senior managers and executives, it is only black owners such as Sekunjalo’s Iqbal Survé and Mahloele who have taken it upon themselves to set the record straight and take the commission into their confidence. The rest, mainly white executives and company owners, are happy to be unaccountable cheer-leaders.

Proof? Look at the billions of rand that were lost in the markets by organisations such as Steinhoff, along with Jayendra Naidoo’s R9. billion Lancaster 101 BEE extravaganza. The transactions raise even more questions than answers.

Is there a systematic attack on black capital and successful black businesses in the country?

Last week, the commission heard how Naidoo, who was strongly associated with Steinhoff, received a R9.4 billion loan from the PIC in a transaction which later cost the government asset manager R5.6 billion.

It is still unclear how many people are employed by Lancaster 101 and how Naidoo became the sole BEE beneficiary of the Steinhoff International deal despite testimonies from PIC executives.

Cool heads at the commission need to prevail and profitable black businesses that are making a positive impact economically in SA need to be protected instead of being thrown to the wolves.

Black business in South Africa is currently under siege, so much so that the face of corruption in South Africa has been fallaciously painted black.

Black businessmen, politicians and public servants continue to dominate the front pages of largely white--owned media platforms. This approach seems to forget, by default or by design, that behind every corrupt individual is a corruptor with the financial muscle and resources at hand to continue entrenching themselves in the South African economy 25 years after democracy.

There are a number of factors that can be associated with “black on black violence", especially when one takes a closer look at the living conditions of black people from an economic perspective in the slums surrounding inner cities where poverty, unemployment, crime and lack of access to economic opportunities often reigns supreme.

In the South African context, the lack of access to economic opportunities is often looked at and characterised as a black problem, much like how “black on black violence" is characterised in the United States.

Currently, it’s the majority of young black graduates who are at the receiving end of unemployment. It is also mostly the black youth between the ages of 21 and 35 who are affected the most by unemployment.

Most young black South Africans still struggle to gain access to funding opportunities to finance their business ideas.

Those who have performed miracles to jump over the hurdles and cut through the red tape are still faced with the difficult task of gaining access to government and state-owned enterprise contracts and business opportunities.

In order to gain access to those opportunities, capital is often a must and as with most black-owned companies, their main source of raising capital is through state-owned institutions such as the PIC, National Empowerment Fund and other development finance institutions around the country.

This makes competition for financial resources very scarce. The enablers of black economic progress in SA are organisations such as the PIC and development finance institutions.

Therefore, cool heads need to prevail as it is not in anyone’s best interest to see the demise of companies that are flying the flag for economic transformation in South Africa.

Black-owned and run companies must be supported rather than be targeted and treated like endangered species that must be killed.

Ayanda Mdluli is Independent Media’s senior investigative reporter.



Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

25 views0 comments