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THE finweek

Apr 23 2010 06:00
<p>MUG SHOT </p>
<p>AURORA </p>
<p>IT SEEMS Pamodzi Gold is terminally bedraggled by some of the worst manifestations of black economic empowerment. First, we witnessed the public display of blundering incompetence when Ndaba Ntsele ran the mine into the ground in a litany of ill-timed shenanigans. As if the memory of that lesson evaporated into thin air, two more dimwits strode on to the scene, this time bearing presidential names - and as much nous in mining as wannabe geology students of a backyard college. </p>
<p>Khulubuse Zuma (nephew of our current President) and Zondwa Mandela (grandson of Nelson Mandela) conjured Aurora - obviously thinking mining was pretty much a pick 'n shovel game. </p>
<p>Asked if the Aurora bid had been naïve, Pamodzi liquidator Enver Motala said: "No. They were youngsters, they saw the opportunity to acquire a mine - but they relied on only one funder." Surely there's a crime in that statement? If youthful exuberance is what drove the duo into mining, why on earth was a loan advanced in the first place? The problem with black economic empowerment is not only is it a catch-all for extreme avarice but its terminal failure also carries no consequences for the morons who - let's face it - would otherwise be shovelling dirt. The difference: there's dignity in shovelling dirt. </p>
<p>HOT SHOT </p>
<p>ALWAYS KEEN TO blaze a new trail to prove that the Democratic Alliance party is indeed a better alternative, whether intentionally or unwittingly, the Western Cape premier was quick off the mark to capitalise on the controversy surrounding the ANC's business interests and how those benefit from State coffers. Introducing new provincial legislation aimed at restricting provincial officials' ability to do business with the State, Zille said it's long been recognised the absence of such restrictions was a key driver of corruption. </p>
<p>While Zille's actions beg questions about what Government is now going to come up with in its review of the State tender system, the acid test will be whether Zille and her party will support moves to regulate the way political parties are funded. </p>
<p>Imperilled by ethical conflicts of interest </p>
<p>THE STORM ABOUT the legality of the ANC's controversial investment arm - Chancellor House - and its alleged conflicts of interest has led analysts to finger the company for breaching business ethics in its apparent pursuit of party political patronage. It's just a symptom of a much bigger problem in South Africa: the absence of any legal barrier to political parties becoming involved in business, says University of Cape Town Professor Pierre de Vos. </p>
<p>Professor Steven Friedman, a director of the University of Johannesburg's Centre for the Study of Democracy, agrees. Commenting on the brouhaha that has erupted over Chancellor House's 25% stake in Hitachi Power Africa and the possibility of it benefiting substantially from Hitachi's R38bn contract to supply boilers to an Eskom coal-fired power station, Friedman says: "The ethical question is quite simple: if a political party establishes an investment arm, the idea that conflicts of interest between the public and the private aren't going to arise is absurd. That's especially true in a country that already has a huge problem with the way politics and business intersect." </p>
<p>While pressure mounts on Parliament to make good on its 2002 promises to pass the necessary laws to regulate political party funding - and while Cabinet ministers such as Barbara Hogan are now calling for that regulation publicly - ANC treasurer general Mathews Phosa argues the ANC and other political parties have been forced to establish such investment vehicles because funding by SA's Independent Electoral Commission (IEC) isn't enough. </p>
<p>"As long as parties receive peanuts in funding, political parties are entitled to raise funds privately," Phosa was reported as saying shortly after calling Chancellor House trustee Popo Molefe a liar for denying there were any plans for Chancellor House to disinvest from Hitachi Power Africa. </p>
<p>However, Phosa's comments - plus his admission that Chancellor House exposes the ruling party to serious conflicts of interest - stopped short of pointing out the horse may well have already bolted when it comes to the renewed calls for regulation with regard to party political funding. </p>
<p>The secrecy about what Chancellor House has earned, how it makes decisions and who actually benefits from it - coupled with the lack of control/information the ANC's national executive committee seems to have over it - suggests it has morphed into a corporate entity that currently benefits key individuals who are, in turn, able to guide Government policy in a direction that would further enhance specific personal interests. </p>
<p>Hitachi can still not say who the "natural persons" who stand to benefit are. The claimed R50m in possible dividends does not take into account the entire worth of the Chancellor House stake. </p>
<p>US$16,4m </p>
<p>THE RECORD FINE Toyota Motor Corp has agreed to pay United States safety regulators in response to the government's claim the Japanese vehicle manufacturer knowingly delayed a massive recall to rectify an accelerator pedal malfunction in January. </p>
<p>HEAR SAY </p>
<p>"If this had happened a couple of years ago, governments would have had the money to step in and provide support. But right now - after the crisis - that money isn't there. This could be enough to push some weaker airlines to the wall." - VANESSA ROSSI, senior economic fellow at Britain's Chatham House commenting on the economic impact of the volcanic cloud halting flights throughout Europe. </p>
<p>"Icasa has a constitutional mandate to ensure this naturally monopolistic function - which connects users between fixed and mobile phone networks - is effectively regulated." - LINDIWE MAZIBUKO, Democratic Alliance shadow deputy communications minister, following SA's communications regulator releasing draft interconnection regulations. </p>
<p>"We want to use this R1bn fund to encourage and give the banks confidence to take on some of the risk. But of course our local banks are well run and regulated and I can say with confidence they will not lend recklessly." - TOKYO SEXWALE, Human Settlements Minister, after a meeting where SA banks agreed to form a team to address the gap in the housing market. </p>
<p>"We can complain about the global industry poaching (South African engineering graduates) but we can't abdicate our responsibility to train and train and train." - SUSAN SHABANGU, Minerals & Resources Minister


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