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Saki in ANC payoff scandal



Buddy Naidu and Simpiwe Piliso, Sunday Times, Johannesburg, 9 March 2008

Probe of ANC front company shows R9m from Stanlib deal was paid to party coffers


An audit into the ANC’s finances has exposed the involvement of one of the country’s top businessman in a political party funding scandal.

The Sunday Times can today reveal how politician-turned- businessman Saki Macozoma has been called to account for millions paid to the party following a R1.5-billion empowerment deal involving Standard Bank, Liberty Life and asset management company Stanlib.

Shortly after the deal was completed last year, an amount of R9-million, from the proceeds, was paid to the ANC.

Macozoma — a former ANC NEC member who is worth about R617-million — confirmed yesterday that a trust with links to the ANC’s front company, Chancellor House, had benefitted from the Stanlib deal.

Two weeks ago the party’s new treasurer general, Mathews Phosa, confirmed that an audit of Chancellor House was under way.

The audit would establish the value of various empowerment deals, and ascertain whether there were any conflicts of interest.

It also sought to protect the party’s reputation and promote “ethics and good governance in business”. There were hints that criminal investigations could follow if anything untoward was uncovered.

Officials are scrutinising documents for details on payments or shares the party or its officials received on its behalf from some of the country’s biggest money-spinning deals.

Yesterday, Macozoma denied personally giving money to the party from the Stanlib deal. Instead, he said he “understood” that a trust involved in the deal “had a relationship with Chancellor House”.

Macozoma said he recently fielded queries from a trustee of the Zandile Trust — headed by Nicholas Wolpe, the man who ran the ANC’s network lounge at its December Polokwane conference — as to the total amount due from the deal.

However, Macozoma said that this trust was in the consortium by default after an ex-partner, Ronnie Ntuli, pulled out.

“The boards of Standard Bank and Liberty Group conducted a thorough due diligence on the empowerment partners before it approved the deal,” he said.

The subsequent exit of Ntuli and the changes in the shareholding did not get board attention because the transaction was not material in size, he added.

Asked about his knowledge of Chancellor House, Macozoma said the party’s company was a “badly kept secret”.

After years of speculation, the party’s former treasurer general, Mendi Msimang, admitted to its existence at the Polokwane conference.

In a report presented during the conference, Msimang further said that members were “deployed” to big business and paid the party a “compulsory levy”.

Msimang warned that some people used the ANC’s name to clinch deals while paying little to the party.

“We also have to express our dismay at the sleight of hand that has greeted our appeals from comrades deployed, we want to stress the word deployed, in the civil service and private business.”

Ironically, Msimang was instrumental in organising party backing for the R6-billion Telkom empowerment deal in 2005. He wrote a letter to a US company that at the time was selling its stake in Telkom, stating that he had consulted President Thabo Mbeki and the ANC’s executive committee, to support a bid by a group involving then ANC head of the presidency, Smuts Ngonyama.

Ngonyama admitted “facilitating” the deal and the Sunday Times previously published details of how two companies under his control in the consortium got an 18% stake. It later emerged that Ngonyama sold 5%, then worth more than R50- million.

The ANC’s scrutiny of some of the country’s biggest empowerment deals follows accusations of deals for pals and criticism from organised labour. Cosatu has slammed the BEE system, saying it “ultimately creates a conflict of interest between those who want to use the state to profit themselves” and their political allies.

Factions representing the old and the new guard of the ANC are fighting for control of lucrative empowerment deals.

As a result of the Chancellor House audit, details have now emerged of how the ANC backed efforts by big empowerment players to secure lucrative deals, in return for donations to the party.

The new ANC leadership is concerned that some of these players have enriched themselves at the cost of the party.

Last week it was revealed how Bulelani Ngcuka — husband of Deputy President Phumzile Mlambo Ngcuka — was dumped by business partners bidding for a R7.5-billion empowerment stake in cellphone giant Vodacom.

Worried that Ngcuka’s close ties to the present government would count against them in their bid for the deal, former Eskom chairman Reuel Khoza, businesswoman Anna Mokgokong and former civil servant Nkenke Kekana, deserted him.

Until recently, Ngcuka’s group, which included former Mbeki political adviser Moss Ngoasheng and Macozoma, was one of the front-runners, but this week it emerged that ANC president Jacob Zuma’s key financial backer, Vivian Reddy, had been asked to get involved in the deal.

Although there is nothing illegal about businessmen making donations to the party, it raises questions about the ethics around seeking political endorsement for deals.

Judith February, a political analyst at the Institute for Democracy in SA (Idasa), said: “We have a complete lack of regulation at the moment and the rules of the game are unclear.”

Ryan Fisher, a lawyer who consults BEE practitioners and empowerment consortiums, said: “I think despite the best efforts of the legislature, the practice [of kickbacks in business deals] is commonplace.”

Describing the practice as unethical, he said: “The problem is that the current dispensation is not doing enough to detect and punish offenders.”

From: http://www.thetimes.co.za/PrintEdition/Article.aspx?id=723061

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