Gleason,+Levers+of+Power+Misused,+BDay+05-06-13

Business Day, 13 June 2005
=Levers of power have been misused blatantly=


 * David Gleason**

LAST week a discomfited Bulelani Ngcuka, famous as the former national director of public prosecutions, told an audience in Johannesburg that he was taking to heart the advice tendered by his mother-in-law — he was keeping his lip buttoned on the outcome of the Shaik trial.

Of course, he should have listened earlier, especially when he held that notorious briefing for black editors and revealed his agenda for Deputy President Jacob Zuma.

Put elementally, this was to sock it to him, blacken his name and wreck his chances of succeeding to the presidency. But he wasn’t going to risk trying him.

He didn’t need to — the media has done the job for him. Business Day’s line is that, in the light of Judge Hilary Squires’ judgment (Hardline Hilary, as he was labelled in the Zimbabwe press last week), Zuma should do the decent thing and walk off, like Capt Titus Oates of Scott expedition fame, into the bleak wasteland of human failure.

I am much more concerned about the way in which one of the most powerful of the state’s institutions has been crudely hijacked into providing the means that may enable Zuma’s opponents to drag him down. I complained bitterly last year over that prima facie farce, and I warned that the collateral damage might be unmanageable.

This is an unpopular view, especially among the ruling elite, some businessmen and editor Peter Bruce. But I don’t mind that. In any event, I have always thought columnists should question, probe and play devil’s advocate.

At least one undeniable truth to come out of this farrago is that Ngcuka’s time as the first national director has left all of us with a seriously worrying legacy. The state’s power to control its citizens is easily manipulated, often to an individual’s detriment. In this case, the blatant misuse of the levers of power has left the ruling party looking as though it has been struck by a hurricane.

Almost every paper I have read in the past week has either predicted or called for Zuma’s departure. And, as I was writing this column, news reached me that, on Saturday, President Thabo Mbeki was being pushed by his advisers towards dismissing Zuma from his position as deputy president. From his perspective, it might be much cleverer, though, to allow the legal process to take its course.

Then there is the issue of Zuma’s undeniable standing and support within the African National Congress (ANC). This presents Mbeki with the most difficult conundrum. Getting rid of Zuma will not be easy, and the rebuff delivered by the ANC in Western Cape through the election of a chairman not of Mbeki’s preference is proof of that.

As I observed last week, the dilemma is on Mbeki’s plate. When South Africa’s political stability was first raised some months ago, Mbeki flew into a rage and publicly berated Anglo American CE Tony Trahar. Ironically, this issue may now have returned — and at the worst possible time.

It looks as though we are in for a bumpy ride.


 * From: http://www.businessday.co.za/articles/bottomline.aspx?ID=BD4A55845 **



Business Day, 13 June 2005
=If it’s open season, take aim at Simane =


 * David Gleason**

THE hunting season has opened. And there is no longer any royal game. If the broad definition of corruption provided by Judge Hilary Squires is applied across the board, there must be many people running for the hills right now.

Among the cases that demand attention is that of the Industrial Development Corporation (IDC) and the involvement of its former CE, Khaya Ngqula, now CE of South African Airways (SAA), with businessman Mzi Khumalo in that Simane affair which netted Khumalo something well north of R1bn.

The facts are that mining house Harmony was looking for an empowerment partner.

A broad-based grouping called Simane became the candidate after Mashudu Romano’s Komanani was unable to stump up the R8m needed to underpin the deal.

Khumalo, through a mix of what online internet newspaper Moneyweb called at the time inducements, bullying and dubious tactics, secured control of Simane. He then sold the shares Simane acquired with IDC financial support, apparently for about R1,4bn, by circumventing the restrictions placed on their trade.

Khumalo then managed, it seems, to move a large part of the proceeds offshore through, according to some sources, Deutsche Bank. Two IDC officials assisted Khumalo through this process — Andile Reve, who has emerged as chairman of Metallon Investments, a Khumalo company, and Muvhango Netshitangani, who received a “loan” of R6m and was last heard of reading for an MBA degree in the UK.

A formal complaint was laid by IDC officials with the Scorpions, led at the time by Bulelani Ngcuka. Nothing more has been heard of the matter, and the only conclusion is that it has been swept under the carpet.

Ngqula has long been linked with Khumalo.

The two men own houses close to one another on France’s Mediterranean coast. Ngqula has been exposed in recent weeks for his hedonistic lifestyle, which involves the extravagant use of helicopters and private jets for his travels between Toulouse and Paris.

It is certainly intriguing that Khumalo, Ngcuka and Ngqula share a common friendship, as it is that Khumalo is an interposing agent in the purchase by SAA of its new fleet of Toulouse-built Airbuses.

There are many questions here about sums that are, frankly, stratospheric and which involve one of the country’s premier investment agencies.

And there is a surfeit of issues across the area in which business and politics connect, many of which will be seen to have slipped across that thin line that divides corruption from legality.


 * From: http://www.businessday.co.za/articles/bottomline.aspx?ID=BD4A55844 **



Business Day, 13 June 2005
=Savers and the economy shortchanged =


 * David Gleason**

YOU can talk politics until you are blue in the face, but what really counts is economic growth and emancipation. And the prime engine of economic growth is an efficient national savings industry.

This requires a system comprising channels that yield returns that will entice ordinary folk to save still more. These channels are the route through which capital is provided to fuel the engine of the economy.

The priority in SA for decades was the movement to achieve political liberation. That was brought to a conclusion in 1994. Since then, a strong platform for growth has been laid through sound monetary and fiscal policies and a return to the world.

At the end of the day, self respect and dignity are what it is all about — and that is available only through a broad participation in strong economic growth.

A weak and inefficient savings industry will always be a major hurdle — and this is what we have had for too long.

The revelations of the past 18 months of the iniquities applied against users of two of these channels — retirement annuities and endowments — and the recent rulings of the Pension Fund Adjudicator, show starkly just how gross the abuse has been.

Last week, in what was an extraordinary admission by the life assurers of their culpability, the Life Offices Association submitted proposals to the national treasury that are nothing short of radical.

The essence of these is the introduction of commission payments over the life of the policies, coupled with major reductions in the front-end commissions that have always devastated returns in early years.

The average life of policies written is about 17 years — but the average period before termination comes out at about eight years. The exorbitant front-end commissions paid have meant that those needing to retire policies early have been left denuded. Out of this has come wealthy brokers, shareholders and executives — and very poor policy holders.

This is not, of itself, sufficient. The administrative costs associated with retirement policies have to be managed a great deal better — and cheaper. That is the real headache for the assurers, not what brokers are paid.

There are two losers here: a generation of savers and an economy deprived of the capital it so urgently needs to fuel its growth. Those who have been so badly treated in the past have lost out, except the handful who have successfully sought the protection of the adjudicator.

As an example, Suzanne Vos, the long-standing Inkatha Freedom Party MP, has written to tell me how she bought a single premium policy for R18000 in 1984 on the basis that it would deliver just under R1m in 2007 and on which the value is now about R400000.

Also in 1984, Vos was persuaded to take out another policy into which she paid a monthly premium, again on the promise of R1m on maturity. It is now valued at about R500000.

Unsurprisingly, she is very angry. So are many others.


 * From: http://www.businessday.co.za/articles/bottomline.aspx?ID=BD4A55843