ANC+Western+Cape+ethnic+wrangling,+Carol+Paton,+Financial+Mail

Financial Mail, Johannesburg, 19 January 2007
=WESTERN CAPE= =//Ethnic wrangling//=


 * By Carol Paton**


 * In the Western Cape,** provincial premier Ebrahim Rasool and his associates are pitched against another ANC group associated with provincial secretary-general Mcebisi Skwatsha. It has clear racial undertones: Rasool's detractors are constantly totting up which ethnic group is getting more of the commercial action.

It is difficult to discern truth from conspiracy in the province. But what is clear is that the party is dissolving into a mess of allegation and suspicion, all linked to commercial interests.

Rasool has been accused of favouring his own ethnic group and support base. That is a view given to the //FM// by many in the provincial ANC, as well as some national leaders, and the opposition Democratic Alliance.


 * CASE 1: WESTERN CAPE. Mentioned: Ebrahim Rasool, Mcebisi Skwatsha**

But the evidence is circumstantial at best. There's no doubt that a small grouping has done particularly well, yet all are arguably successful business people in their own right.

The //FM// contacted some of those mentioned by detractors, who were naturally indignant about allegations that they had benefited from any favouritism. Said one: "What you see is a lot of jealousy. I have got absolutely nothing from government or Ebrahim Rasool. "

One incident is often presented when you ask for proof from Rasool's detractors. An amendment to the province's gambling law 2½ years ago in effect lowered the tax burden on the Grand West casino, partly owned by an empowerment grouping. The amendment, reported investigative magazine //noseweek//, would result in a loss of R40m to government over five years. Those who benefited from the change in the tax base argue it was done to correct bracket creep.

But the windfall of a lower tax burden had an added advantage for the empowerment investors in Grand West: in return for securing the deal with provincial government, Grand West majority shareholder Sun International sold them another tranche of shares in the casino at an undisclosed discount. This was confirmed to the //FM// by a member of the consortium.

Another incident is the confusing bail out of failing textile company Novel, which was bought by Wesgro, an entity regarded with much suspicion by ANC members. Wesgro paid R10m in 2005 for Novel and sold it last year to Brimstone for R6,5m. From its balance sheet, the company appears to have huge liabilities (it is only solvent thanks to a shareholder loan of R67m). It is far from clear why anybody would want to buy it, except as a probable deferred tax asset. Yet temperatures are so high in the province that the sale caused a furore in the provincial legislature and the ANC, which ordered an inquiry. The //FM// was given a copy of the report, which contains no opinion on the value put on the business.

New opportunities are being closely watched by all sides. One has already raised eyebrows: the disposal of Somerset Hospital, the large site of an old public facility that lies exactly between Greenpoint's new stadium and the Waterfront shopping development. The new owners of the Waterfront - London & Regional and Dubai World - are understandably hungry for it, as is every local developer.

In December, a Western Cape delegation visited Dubai at the invitation of its government.

The trip to Dubai has come under scrutiny from the opposition and from inside the ANC. Apart from the matter of who picked up the tab for the R16 000/night hotel (Rasool told the legislature he was not sure whether the province or Dubai was paying), Rasool has been closely questioned on whether any promises were made on the sale of Somerset Hospital. Rasool said his delegation refused to discuss the issue. The site will be disposed of "strategically in an open, competitive tender process" to benefit "the broadest range of empowerment interests".

The //FM// put a range of questions to Rasool, but his spokesman said he had no comment.


 * From: http://secure.financialmail.co.za/07/0119/cover/coverstoryb.htm**

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