Are BEE beneficiaries of Mbeki-era standing in the way of transformation?

jay-naidooJay Naidoo of J&J Group.

The Maytrix argues that the comrades of yesteryear who are now sharing boardrooms with the oppressor have themselves begun to block the transformation agenda to protect their profits.

In a series of articles, he uses Pep Guardiola’s usage of Leo Messi as a False 9 to beef-up the midfield and destroy the opposition to explain South Africa’s economic set-up in which white capitalists use a few blacks as their False 9’s to preserve white privilege.

Chairperson of South African Airways (SAA) Dudu Myeni recently complained that she’s being hounded for transforming SAA’s procurement spend to empower black business. It has recently been revealed that only 2% of SAA’s spend goes towards black businesses.

Just over two decades into democratic SA we sit with appalling levels of participation by blacks in the economy despite the fact that the majority have empowered the ruling party to improve their lives and go beyond the current cosmetic rainbow nation-talk.

As seen with the Airbus saga, SAA has now developed the courage to start asking suppliers to be black-owned. Myeni wants SAA suppliers to have black majority shareholding.

Elsewhere, Eskom’s Chairperson Ben Ngubane says they are being hounded for transforming Eskom’s procurement spend.  Such is the resolve to include black business as part of their suppliers, the group’s financial statements reflect the amount spent on black-owned suppliers against a budget of 40%. This is a refreshing practice given the elusive economic transformation that our black leaders have been preaching for decades now.

SOEs are effectively putting the rhetoric to practice. They are adding key performance measures to actually make the rhetoric meaningful and are facing an avalanche of unrelenting storms aimed at destroying anything with a hint of transformation in it.

Let’s look at the case of Mango for example. When the airline wanted to extend the Macquarie aircraft lease deal, SAA rejected the deal and asked for Macquarie to furnish empowerment credentials. Right wing media along with the Democratic Alliance cried foul and began a fear-mongering campaign around SAA’s failure to sign the deal that could save billions.

Contrast this outcry to Eskom’s efforts to cut costs on coal by using Tegeta.

But back to SAA, wouldn’t you want to be Macquarie? Imagine receiving this sort of protection whereby the media goes up in arms when clients refuse to give you deals? What has also gone unnoticed is that former cabinet minister in President Nelson Mandela’s cabinet, Jay Naidoo and Ketso Gordhan, Pravin’s nephew, have a stake in Macquarie through J&J Group. Mango wanted the SAA board to recommend the Macquarie lease deal to Finance Minister Pravin Gordhan. The Public Finance Management Act (PFMA)  is seemingly being used to elevate Gordhan’s role to that of a parallel president who dictates to arms of government on who they may or may not do business with. All of this is done under the guise of financial prudence.

Away from the smokescreen is the Ketso and Pravin conflict which is already apparent. Pravin is Ketso’s uncle.

Even if it wasn’t, let’s proceed to entertain our use of False 9s in retaining the status quo. Macquarie have a Gordhan and Naidoo to protect their business interests against transformation. It sounds absurd because it really is.

Gordhan and Naidoo should be symbols of transformation. But instead, Macquarie can just send them to snipe away any Myeni that dares to impose conditions of black-ownership on any deals that SAA entertains. If you are Naidoo and you co-founded J&J Group for profit, you dare not sit back when the profit is threatened because government wants to transform the economy.

When announcing their recent financial results, Eskom announced that its lawyers have come to a determination that the utility has considerable assets within the coal mining sector. Companies such as Exxaro and Anglo American are among those whose mines potentially belong to Eskom. The targeted mines are those that Eskom subsidised in order to get them operational. Effectively, the advance payment that the utility gave to Tegeta as part of the coal deal with the miner, is not unique to Tegeta.

Eskom have done the same for giants like Anglo American. What is important though is that this state-owned entity owns mines. Side-note: Perhaps the call for nationalisation is mute when it comes to coal, to an extent.

While most efforts to transform the country are met with antagonistic cries about ‘populist policies which may scare-away investors’, it turns out the public tend to invest a lot in the private sector. Eskom’s funding of coal mines as part of it’s coal supply agreements (SCAs) is effectively a form of investment in the mining sector. Now, for a country that talks black industrialization, an entity such as Eskom is primed to facilitate such. What stops Eskom from funding coal mines to black businesses as part of the SCAs?

The 25% that gets supplied by Anglo could be coming from black-owned coal mines. Think for a minute at the ease with which this can be done. Black industrialists have operations setup with the help of SOEs that later become the client. No rocket science here. But somehow, we are being led to believe that these types of transactions are so complicated that you need centuries of generational experience to pull them off.

Anglo-American signed a BEE deal with, among others, Zanele Mbeki, the wife of former president Thabo Mbeki through Anglo Coal Inyosi, during the same period that the banking deals were signed by the same Zanele Mbeki along with the other businessmen close to the former president. It is very easy for any attempt by Eskom to transform coal supply to black-owned business to be regarded as an attack by the Mbeki-aligned businessmen.

They are already entrenched in the very system that the current administration appears hell-bent on transforming. It is no surprise that Anglo beneficiary, Sipho Pityana, has now morphed into an anti-government critic who goes as far as mobilising business to effect regime change. The government that is being attacked by the likes of Pitjyana is finally using it’s power to effect economic transformation. That unfortunately comes with a shake-up in key sectors such as mining. Anglo are very unhappy about Eskom’s plans to put the coal mines it funded onto it’s balance sheet, where they belong. This has the potential effect of eating into Anglo’s profits, which directly affects the dividend payouts that the Mbeki-era beneficiaries could use to go cash-positive on their deals. Zuma must fall. He’s hurting the status quo, which desperately needs a shake-up in order for the country to move forward and realise it’s full potential. It is very clear that the transformation agenda has many False 9s fronting the defence of, instead of attacking, our racialised economy. As a black person I say “our” economy with half-heartedly because it doesn’t represent me at all.

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  1. Like they would even want to debate it. Lest we forget the stooges are everywhere morphed into do-gooders and “experts”

  2. The whole problem here is that all these chairpersons of the affected SOEs are masquerading as activists of transformation while in real terms they are just proxies of the Guptology. They actually miscalculated their moves by thinking that their excuse for not delivering to their promise will gather more support should they play victims of political game.

    I don’t take their lame excuses seriously because they need to be asked whose problem is it that after two decades of ANC in power we still end up with such inequality. The party that deployed them should be blamed and rather they should stop justifying their failure to deliver as promised on the issue of transformation. In particular, Dudu Myeni-Zuma is just as bad as a rotten potato and that woman is only good as the chair of J.Zuma’s foundation. Anywhere near government institutions she is just as good as a poison. She lost over R4.5 billion which if SAA was a private entity could have been shut down. Now she must tell us if it was transformation agenda that caused her to lose such money.

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