KHAYA SITHOLE: Big business joins state at feeding trough

In the context of widespread corruption and governance lapses across key entities in SA, it is important to reflect on one of the significant developments initiated by the business community in 2017.

Four months ago, Business Leadership SA (BLSA) launched its business pledge in Alexandra, which had at its core a commitment to oppose and fight corruption, avoid anticompetitive behaviour and protect whistle-blowers.

This was in direct response to the pervasive corruption scandals that were exposed in the public sector, underpinned by the Gupta e-mail leaks.

As a representative of SA’s largest 80 businesses, BLSA has the requisite resources and influence to drive change in the country. But since the launch, reality has intervened and the pledge has turned out to be more challenging to implement.

The successful execution of large-scale corruption requires enabling agents across the system, including banks, management consultants, legal and finance professionals

When BLSA launched its pledge, the consensus was that corruption was a disease of state-owned enterprises (SOEs), cultivated and protected by political elites. However, corrupt relations are seldom isolated. The successful execution of large-scale corruption requires enabling agents across the system, including banks, management consultants, legal and finance professionals.

It is therefore no surprise that such professional services have emerged as key enablers of state capture. Big business is as complicit as politicians in facilitating corruption.

A distinguishing feature between the private and public sector governance systems is the perception of competence associated with private sector entities. When it comes to companies with an international footprint, the responsibility to foster good governance is even more paramount. So the problems at Naspers and Steinhoff should concern us all.

Naspers and its subsidiary, MultiChoice, have been fingered as beneficiaries of the state capture project. In response, the Naspers leadership has sought to distance itself from the scandal by nonsensically claiming that the MultiChoice board operates autonomously.

Given the fact that former communications minister Yunus Carrim is on record as stating that the Naspers chairman actively participated in talks aimed at influencing broadcast policy, it is alarming Naspers believes it can lie its way through this crisis.

Such conversations could only have occurred within a context of preserving the competitive advantage MultiChoice enjoys in the pay-TV market.

When BLSA was founded, it dismissed the idea of monopoly capital as a fallacious concept. How tragic that one of its members not only advocated, but used, its access to capital to preserve a monopoly.

The dismissal of Markus Jooste as the CEO of Steinhoff is the latest twist in a transcontinental fraud saga. Pending a probe primarily based in Germany regarding the authenticity of its accounts, Steinhoff had dismissed all speculation and assured investors its disclosures were above board. When its auditors declined to sign off the financial statements, it became clear the disputes were serious.

While it is unheard of for a Top 40 company in SA to fail to get its financial statements signed off by its auditors, one has to acknowledge the role of outside agencies in forcing the hand of Steinhoff and Naspers. The intervention of German authorities got Steinhoff to react. Similarly, Naspers now seems to be galvanised since the US authorities announced they are looking into issues at the company.

Perhaps it isn’t just in SOEs that our compliance systems have failed us, but everywhere we look. Our accountability and governance crisis is not just a public sector disease, it is a national crisis. Got that, BLSA?

• Sithole (@coruscakhaya), a chartered accountant, academic and activist, chaired the Lesedi Education Endowment Fund as part of the #FeesMustFall campaign. He writes in his personal capacity.