In a twist of bitter irony, the term areti — Greek for “virtue” — serves as a moniker for one the most audacious displays of corporate deception in recent history.
Several supposed paragons of corporate virtue, including Dimension Data cofounder Jeremy Ord and former CEO Jason Goodall, have found themselves embroiled in a scandal that lays bare a breathtaking disregard for ethics and legality.
Judge Denise Fisher’s judgment last week branding their R1.4bn sale of The Campus “brazen and dishonest” was a scathing indictment of their actions.
The court laid out how these executives concocted a scheme that flagrantly violated broad-based BEE legislation by manipulating property valuations. To top it off, they enlisted property consultant Martin Epstein to mask their true financial interests. The verdict was a no-holds-barred exposé of corporate greed.
Undeterred by the damning evidence, the executives are gearing up to appeal the decision. They argue that the transaction structure was your run-of-the-mill private equity set-up, complete with legal blessings from top law firms. The notion of gain? Pure fiction, they say.
Their main argument is that the court relied too heavily on hearsay evidence — statements made outside court. The judge found these statements credible, revealing the executives’ true intentions. Convincing a high court to dismiss such critical evidence is a long shot, to put it mildly.
Their defence, in a 27-page court filing, also rests on the assertion that they complied with BEE requirements. They argue that selling The Campus to a black-woman-owned investment house, later managed by a black fund manager, was legit.
But Fisher saw through this charade, revealing a complex web of nominee arrangements and en commandite partnerships designed to obscure the real beneficiaries. The so-called virtue compliance is nothing more than a mirage, a smokescreen to distract from their true intentions.
Another cornerstone of their appeal is the claim that they did not breach their fiduciary duties. They argue that their investment in the fund did not constitute a personal financial interest at the time of the transaction approval.
However, the court’s findings paint a starkly different picture. The judgment lays bare how the executives stood to gain significantly from the transaction, making a mockery of their claims of impartiality.
And, for the sake of argument, even if one were to believe the executives’ story, it doesn’t explain why they hid a known investment opportunity in the transaction from the parent company, NTT, which they were obligated to disclose as part of their duties.
Expect this defence to crumble under further scrutiny.
The executives also argue that the transaction was ratified by Didata Investments. So? Should that nullify any claims of impropriety? They argue that the continued reliance on the transaction for BEE status indicates tacit approval. This defence seems more like a last-ditch effort to salvage the reputations of some of the biggest names in business.
Despite the shaky foundation of their appeal, the executives’ right to challenge the judgment is indisputable. Due process is the cornerstone of justice, ensuring that everyone has the opportunity to challenge findings they believe are incorrect. The former Didata executives are doing just that, and hats off to them for giving the legal system another chance to get it right.
As this saga continues, it’s clear that the road to redemption for the founders of Areti Partners Limited — the vehicle used to buy and hold the executives’ interests in the deal — will be arduous and filled with hurdles.
Regardless of the outcome, the case is a stark reminder of the need for accountability and transparency in corporate governance — a lesson the so-called virtuous cannot afford to ignore.
• Motsoeneng is Business Day deputy editor.
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