Editorial

Dear Reader


Whorehouse at the foot of Africa

There’s not much to add to the latest Gupta story. Five years ago Noseweek reported: “The Guptas, who emigrated from India to South Africa in 1993, are best known as the power behind computer marketer Sahara, but are nearly as well-known for their claimed close friendships in high places. They talk of regular visits to the Mbekis, and often flying Jacob Zuma in their private jet to his campaign engagements. They recruited Tokyo Sexwale’s Mvelaphanda...” And so on.

Three years ago, Noseweek reported on the Guptas’ dealings with steel company ArcelorMittal as follows: “Justifying the composition of her company’s new BEE structure, ArcelorMittal’s chief executive told the Mail&Guardian that “strategic” (as opposed to broad-based) black investors had been included “where the company needs assistance in a particular area… For ‘strategic’, read ‘politically connected’; for ‘assistance’, read ‘lobbying with government’. So what are the lobbying fees, and to whom do they go?”

In summary: President Jacob Zuma’s 28-year-old son, Duduzane Zuma, got shares that he could sell back to the company four years later for between R46m and R104m,  (What most upper middle class people might earn in two lifetimes.) The Gupta family company Oakbay, too, got shares that could be worth between R46m and R104m.

So, how did the Guptas get their stake, and how did Duduzane Zuma get a stake as large as theirs?

ArcelorMittal’s spokesperson explained (to Moneyweb) that the Guptas had been cut in as “major facilitators” of the deal. And the president’s son, who stood to get as large or a larger stake than the Guptas?

The spokesperson was stumped: “I can see what you’re saying – was there a greater contribution from him to warrant it? Or was it purely based on the fact that he’s the president’s son? I don’t know. I can’t answer you for sure.”

Next day government spinners were describing the deal as “controversial, not corrupt”. It looked horribly like a by-now- standard bribery procedure: the bribing company rarely pays the bribe directly; it pays a well-connected agent or “facilitator” a ridiculously high facilitation fee, who then uses a chunk of it to pay a friendly bribe. Ask Siemens and BAE. Ask Schabir Shaik.

Cartoonist Stacey Stent politely comments for us in this issue.

Put more bluntly: Zuma and his cronies have turned our country into a whorehouse: we’re there to be screwed for a few bucks by any passing prick. Our president is a glorified pimp.

Orange alert was justified

In nose158 readers were referred to a letter that Leonard “The Liquidator” Katz of ENS had written to Moneyweb, attacking our report (nose157) about the sale of Cape Town’s 15 On Orange hotel by the liquidators of a company called A Million Up (AMU).

“I have always been of the view that it was a waste of time to engage with Noseweek as their articles are vindictive and clearly have their own agenda,” Katz wrote. “The article on AMU plumbs new journalistic depths. It makes use of baseless speculation and rumour… has no basis whatsoever in fact… It is completely untrue that Absa ‘wants to buy [the hotel] in quietly’. After indicative bids for the property have been received, the liquidators will follow an open tender process.”

Which, we reckoned, was good news.

Now it transpires that Noseweek was not alone in suspecting all was not entirely kosher about the veil of secrecy Absa and its lawyers had tried to throw over their plans for the hotel that already owes the bank R581 million. A major US investor has issued summons against Absa in California, making some nasty allegations and disclosures about the bank’s role in the development and how it has staggered under a weight of fraud and reckless lending.

The bank’s motive, he suggests, was to prefer some of its bigger creditors – and hide the inevitable disaster to secure performance bonuses for the bank’s top executives which they should otherwise not have got. (Absa CEO Maria Ramos, we seem to recall, was one of the executives who received a pretty substantial bonus that year.) See ABSAlutely shocking in this issue.

  • Finally there’s the trial of Fidentia’s Arthur Brown. It’s a fascinating, extremely complicated, multi-faceted story and the judge had, in any event, yet to pass sentence when we went to press. So readers must wait for our July issue for a full rundown on the trial and our considered view of the case. The mainstream media have not served you well. Consider reserving your judgment for now.


The Editor

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Submitted by : Martin Foster of Lyttelton Post Office on 2013-05-24 21:09:16
Stacey Stent summarized the situation exactly.

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