Rise+and+fall+of+Queen+BEE,+Thebe+Mabanga,+Sunday+Times

Sunday Times, Johannesburg, Business, 08 April 2007
=Rise and fall of Queen BEE=

//Sacked Absa director Danisa Baloyi has had a long history of top jobs, a thrusting leadership style and political patronage, writes// **Thebe Mabanga**

DANISA Baloyi, one of democratic South Africa’s most influential businesswomen, thought she could survive a financial scandal which left widows and orphans destitute. She was wrong.

As anger grew about her involvement in the mishandling of Living Hands Trust funds by financial services group Fidentia, she was dumped from the board of Absa, one of SA’s biggest banks.

Her academic qualifications came under close scrutiny. She has not yet disputed allegations that she was never awarded a claimed doctorate by Columbia University in the US.

Then her teenage daughter refused to go to school because of the publicity.

Baloyi crumbled. She resigned from 16 company and public body boards. She still retains board directorships of a slew of private entities, some held through her blandly-named South African Women Investment Holdings (SAWIH). Some of these are for shelf companies; others are registered but inactive.

Businessman Saki Macozoma, who has known Baloyi since the late ’80s when they were both students in the US, suggested Baloyi should have handled the Fidentia crises differently.

Macozoma, a Standard Bank board member, explained that banks are “sensitive on issues of trust”.

He said it would have been prudent for her to step aside as soon as the Financial Services Board report into Fidentia came out.

The report fingered Baloyi for a conflict of interest through being on the Living Hands Trust board while having an interest in Fidentia and serving on its board. The FSB also questioned an R8-million loan Fidentia made to Baloyi.

But Macozoma also pointed out that the major difference between black and white directors is that the latter are more adept at handling conflicts of interest.

He also noted that most white directors do not depend on board membership for a livelihood, serving merely for influence and prestige.

“No black director will mortgage their lives for a board fee and forgo all other opportunities. It is thus inevitable that boards will encounter conflicted black directors. If they avoid these, they will have to settle for second-rate black directors,” he said.

Baloyi’s spokesman Dominic Ntsele believes black directors are invited on to boards for their “star power” and are ditched as soon as they are perceived to be tainted. Macozoma said rules and expectations are the same and if directors apply themselves they should cope.

The key moment in the Baloyi saga came two weeks ago, when Absa terminated her membership of its boards. Absa spokesman Makhosini Nkosi said the company would not comment on the matter as Baloyi had raised the possibility of legal action.

That threat came before her withdrawal from other areas of public life and action now seems unlikely.

Absa’s view was that although Baloyi “had done nothing legally wrong, her synonymous mention with Fidentia is harmful to the Absa brand”.

Ntsele would not be drawn on the Absa board machinations, but pointed out that Baloyi wanted “to protect both the Absa and the Danisa Baloyi brand”.

Ntsele said Baloyi had been made a central figure in the drama, but “no one remembers the non-executive directors of Leisurenet, yet [Baloyi] is made to look as though she shared an office with [Fidentia executive director] Arthur Brown”. Ntsele was drawing parallels with the Leisurenet gym chain that sank within recent memory.

But Baloyi’s distance from Fidentia will be questioned on the basis of her remuneration of R54 000 a month — way more than the average R16 000 she got from Absa.

Macozoma recalled his initial impressions of Baloyi as being “an incredibly brave person” with strong political views.

In the US she helped form the Azanian Student Movement, which organised scholarships for South African students and mobilised them politically.

When Baloyi became president of the movement, she emphasised no party political affiliation and tried to unite diverse political views. She is remembered as a counsellor to students with problems, far from home.

Macozoma worked with Baloyi after 1994, in a network of black business people that was a forerunner to the Black Economic Empowerment Commission. He recalls her “militancy, which was absolutely necessary” to achieve black business objectives. Her support for young people remained noticeable during the work of the BEE Commission.

BEE commentator and businessman Duma Gqubule recalls that, after he had worked at the commission, Baloyi singled out him and consultant Andy Brown, the youngest members of the panel, for praise and thanks. Her interest in skills development led her to become the chairman of the National Skills Authority. But Baloyi seems have become too busy. A Gauteng-based businessman, who attributes his success in part to Baloyi’s tenure at the Gauteng Tender Board, which she chaired for eight years until 2002, noted that he observed that Baloyi started running late for meetings — and getting into fights with secretaries.

He believes “she was simply stretched”.

A tourism industry executive who worked with her in late 2004 to formulate that industry’s empowerment charter recalls her appearances at grand functions and crucial stages of the process — but not very much at the working groups of the drafting phase. “She was too busy,” the executive said.

An associate noted: “If South Africa were a normal society, Baloyi would be in education or lecturing.” Instead she moved into business. Baloyi’s rise in the business world seems to be the result of a judicious combination of leadership acumen and political patronage. She was appointed to the Gauteng Tender Board by the then newly elected government to reform state procurement to help develop small businesses. Her later appointment as chairman of Armscor is pointed out as another case of her being sent in to try to turn around apartheid institutions.

Macozoma recalled the role Baloyi played in the establishment of the Business Trust, set up to help create jobs and provide support to government.

He also credits her with turning around South African Tourism, where there “was no pay”. He hoped these contributions “will not be forgotten”.

Characterisation of her work is diverse. Some observers said she is highly competent, others commented that she has a dominating presence and voice but contributes little of substance.

Baloyi took surprisingly long to enter business in her own right, with SAWIH established only in 2002. Ntsele declined to name her founding investors or the companies they are invested in, out of a reluctance to draw them into the controversy surrounding her.

For now, Baloyi is said to be “feeding her grandchild, doing homework and walking in the garden”, things she never had time for in her daily schedule.

“I hope we do not condemn her forever,” said Macozoma.


 * From: http://www.sundaytimes.co.za/PrintEdition/BusinessTimes/Article.aspx?id=431879**

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