Tag: corruption

KPMG: too big to fail?

KPMG is struggling to survive and its recent restructuring and public pronouncements have not helped its cause either.

The hollow ring of the excuse proffered by KPMG interim chief operating officer, Andrew Cranston, that “we were only the doers” must be like a red rag to a bull for Pravin Gordhan and all those SARS employees besmirched by the KPMG SARS rogue unit report.

The destruction which this report has wrought on key management at SARS, its institutional reputation, and the long-term negative effects on our country’s economy might never be fully calculated. It would not be dramatic to suggest that in the long-term, KPMG’s complicity in this report might eventually cost South Africa hundreds of billions of rand.

The admission made by Cranston not only increases the culpability of KPMG in its overt contribution to state capture, but also brings into stark relief the fact that KPMG, both locally and internationally, seem unable to discern right from wrong and appear unable to grasp the concept of real contrition.

Since when was the trigger-man acting on behalf of a “client” not the “doer” in the committing of a hit and since when was the trigger-man not criminally liable?

But for the leaked Gupta emails, the partners of KPMG would have felt no guilt as they, like fat men at a smorgasbord, feasted on their annual partnership profits significantly increased by fees of dubious reports and questionable audits. And even now, as the extent of their malfeasance becomes more evident, they continue to resist with half-hearted excuses of “mistakes made and painful lessons learned”. Adding further insult to injury is the paltry R63-million in reparations which KPMG International has now offered our country.

To the partners of KPMG South Africa, that is simply not good enough. It isn’t good enough to offer a few sacrificial executive lambs and claim “but we didn’t know” and then speak of the importance of improving quality standards while hoping that the news cycle will move on.

As partners of KPMG, you cannot plead ignorance of the fact that your firm has conducted itself in an errant fashion and in breach of the Rules of Professional Conduct over a number of years – this was not a once-off mistake or an isolated error of judgement.

Perhaps it is too late now for KPMG’s South African operation, and if so, then what of its 3,400 employees and is KPMG too big to fail? Curiously, in the midst of the corporate crisis facing KPMG, the firm is clutching at every possible straw to justify its survival. Among these might possibly be the argument that they are too big to fail, which is as unconvincing an argument as the notorious “SARS Report”. The fact is that the statute requires that all companies are audited and it follows that volume of audit work will remain the same with or without KPMG. Importantly, not everyone at KPMG is unethical. If KPMG collapses then the great majority of competent and ethical staff of KPMG will find immediate and gainful opportunities in larger as well as mid-tier audit firms who will have to step up to fill the gap left by KPMG.

The collapse of KPMG might also provide a genuine opportunity to scale up a number of medium size audit firms, especially the “empowered firms”. The demise of KPMG will also help reduce the oligopolistic concentration of the large audit firms and will help promote more healthy competition within the profession.

It is true that the KPMG saga has shocked the SA business sector. But this is an interesting case of ethical destruction. After all, this is how a market economy should deal with its faulty and unethical firms. The case has also created a golden opportunity for SA corporations, and the business sector more broadly, to undertake a genuine and constructive recalibration of their ethical framework across all spheres. There is little doubt that all businesses could raise their ethical standards.

In particular, the collapse of KPMG should be a warning siren for the other audit firms to reassess their internal processes and their corporate governance mechanisms. This is vital for socio-economic development because in modern societies, underpinned by complex financial and economic structures, the audit firms play a unique and pivotal role in assuring that resources are used with probity and propriety. To this end, a number of measures need immediate consideration. For example, corporate SA should adopt the principle of “auditor rotation”, as importantly the audit companies themselves need to appoint non-executive directors with appropriate governance competencies; and external audit firms need to focus on audit work and avoid technical advisory work. Corporate finance advisory operations have no place within audit companies. The notion of “Chinese walls” within the audit firms simply does not work, as KPMG clearly demonstrates.

As often said, we should not waste a good crisis. The KPMG crisis should definitely not be wasted on the SA business and the country at large. The crisis is a stark reminder that our nation needs to re-examine the ethics of doing business, whether in the private or in the public sector. We have no time to prevaricate. Company directors, chairpersons of the boards, and members of the audit committees in particular need to act with vigilance and urgency. As Martin Luther King, Jr reminded us: “It is always the right time to do the right thing.”

By Iraj Abedian and Simon Mantell for The Daily Maverick

Counting the cost of corruption

Corruption costs the SA gross domestic product (GDP) at least R27 billion annually as well as the loss of 76 000 jobs that would otherwise have been created, according to Minister of Economic Development Ebrahim Patel.

This is according to a recent exercise by his department to quantify the cost of corruption in the public sector, based on just a 10% increase in price in infrastructure projects as a result of corruption.

Collusion increases the costs of doing business, stunts the dynamism and competitiveness that is needed and has a negative impact on growth and jobs, Patel said at the Competition Law, Economics and Policy Conference at the Gordon Institute of Business Science.

The culture of “rampant acquisition” is spreading so widely that the professional standards of integrity which are a hallmark of functioning institutions are under enormous pressure. There are some troubling matters to address in looking at corruption and the collusion therewith by professional firms, from auditors to lawyers and others.”

A World Bank study on competition in SA noted, for instance, that in the case of four cartels in maize, wheat, poultry and pharmaceuticals – products which make up 15.6% of the consumption basket of the poorest 10% – conservative estimates indicate that around 200 000 people stood to be lifted above the poverty line by tackling cartel overcharges.

“There are things we can do, practical things, while the wider battle to ensure integrity in the public and private sectors is pursued,” said Patel.

The construction industry, through the seven largest companies, for example, has embarked on a major transformation programme, with three prominent companies selling a large block of their shares to black South Africans. In all, the deal will place construction turnover of “billions of rand” in the hands of black South Africans over the next seven years.

Competition policy is going through something of a golden age, with enormous public interest in the work of the competition authorities and widespread public debate on what is done and what should be done.

Public interest

“The past seven years have seen a focus by government on the public interest consequences of mergers and acquisitions, specifically on employment, small business development, ownership by black South Africans and local industrial capability,” said Patel.

“This is not surprising in a society with so many people who are unemployed, where poverty levels are deep, many citizens feel excluded from the economy and wider inequalities threaten the social stability of our still-young democracy. This is a fertile field for demagogues who offer simplistic solutions to the many who are desperate.”

He pointed out that some commentators, lawyers and economists – while acknowledging the extent of the problems of joblessness – have asked whether it is the proper remit of competition policy to deal directly with unemployment and with the strong focus on public interest issues.

“Two decades ago, economic goals in many countries were framed in the language only of rates of economic growth, with the widespread presumption that growth always, often automatically, results in wider benefits for society,” said Patel.

“Today we live in a wiser world where there is compelling evidence that strong growth has in many cases gone with deepening inequalities and social exclusion, for example of young people. Today there is a broad consensus on the need for inclusive growth.”

There is also a growing constituency of policy-makers across the world who see value in well thought-out and transparent public interest conditions being attached to mergers and acquisitions to bring out the inclusivity of the growth.

“In 1994, at the start of the democratic era, the new incoming government identified high levels of economic concentration as a critical challenge. Today, some 23 years later, the public discussion has returned to this issue,” said Patel.

Manufacturing

In research currently being done on concentration ratios in the manufacturing sector, preliminary results suggest that the top five firms in the sector as a whole accounted for 13.7% of total manufacturing sales in 2011. By 2014 this had risen to 16.2%.

In a three-year period, the data seem to show a growth of 2.5 percentage points in market share – or based on estimated rand value, it may be equivalent to as much as R54bn of additional sales that, had market share ratios remained the same, would have gone to smaller firms.

“Some of this may be due to efficiency gains or other reasons that could be enhancing overall welfare. But clearly, if increased concentration has the effect of displacing smaller companies, issues of social equity loom large. These levels of concentration may be economically unjustified and, if so, should be addressed,” he emphasised.

Racially skewed

In addition, many parts of the economy are still faced with stubbornly racially-skewed ownership profiles, according to Patel.

“The exclusion of most historically disadvantaged South Africans from the ability and opportunity to own productive assets must be remedied to unlock the competitive and development benefits of full participation by all in the economy,” he said.

“The effect of these two structural features of these markets is to stunt economic growth, prevent entry of new players, reduce consumer choice, limit the levels of innovation and dynamism in the economy and feed a growing resentment among black South Africans of the failure to realise the promises made by the Competition Act and the vision of the constitution.”

Source: Business Tech

With €22-billion (about R330-billion) in revenue last year, German software multi-national SAP should have all the expertise it needs to close major deals.

Instead, the #GuptaLeaks and related information show, the world’s third largest software company is not above calling in help from the politically connected, risking contravention of international anti-bribery laws.

AmaBhungane and Scorpio can reveal that in August 2015, SAP signed a “sales commission agreement” with a small Gupta-controlled company that specialises in selling 3D printers.

The terms suggest a thinly-disguised kickback arrangement: If the Gupta company were the “effective cause” of SAP landing a Transnet contract worth R100 million or more, it would get 10 percent.

In the year to follow, SAP paid the company, CAD House, a whopping R99.9 million, suggesting SAP used the Gupta influence network to drive sales of a billion rand to Transnet and other state-owned companies.

SAP denies it paid kickbacks or was party to laundering the payments, arguing that CAD House had “the necessary skills in terms of positioning our solution” and was paid a sales commission for acting as “an extension of the sales force”.

But there are factors suggesting that SAP’s denial does not hold water: there is no evidence that CAD House had any experience marketing or selling SAP software. And CAD House appears to have been used as a front, both to distance the transaction from the Guptas and to launder the proceeds to them.

Neither CAD House nor the Gupta family responded to detailed questions.

Strategic customer

In 2014, Transnet was considered so key to SAP’s business that it was defined as a “strategic customer” – a designation given to just 300 out of 197 000 SAP customers worldwide, according to a SAP presentation found in the #GuptaLeaks.

Despite its special relationship, SAP was seemingly having trouble closing deals with Transnet and turned to the Guptas for help, the trove shows.

CAD House, which specialises in selling 3D printers, is not widely known to be part of the Gupta empire. At the time it was, on paper, half owned by Santosh Choubey, a key Gupta lieutenant employed by their Sahara Systems.

Minutes and other #Guptaleaks records show, however, that CAD House was managed as a subsidiary of the Sahara group – indicating that beneficial ownership rested with the Guptas themselves.

In an interview, SAP South Africa chief financial officer Deena Pillay claimed that CAD House was no different to other sales agents SAP uses. “They’re small guys who would go out there, identify business and come to SAP with that opportunity.

“It’s a lever available to SAP to sell its software… We’ve got a sales force that we employ, so these are the agents on the ground… They are an extension of the sales force.”

In SAP’s world, commission agreements are not unusual. Except in this case Transnet was already a client of SAP and the commission agreement with CAD House made it clear SAP was not so much hiring a sales agent to market a product to Transnet as a fixer to clinch the deal.

The commission agreement was signed on 20 August 2015 by Pillay and another senior SAP executive. It promised CAD House 10 percent if CAD House was the “effective cause” of Transnet signing a R100 million-plus deal with SAP.

CAD House’s “main purpose”, it specified, “is to assist [SAP] in obtaining Customer consent to the Customer Contract and Customer’s requisite signatures to such agreement”.

Due diligence

SAP’s Pillay told us that an “external reputable company” did a “rigorous due diligence” on CAD House before the agreement was signed. Pillay’s colleague Candice Govender, who is SAP South Africa head of legal, confirmed that SAP was aware CAD House was connected to Sahara, but found “no red flags”.

Yet, by the time SAP signed the commission agreement in August 2015, the red flags were in plain sight.

Three weeks earlier, amaBhungane and the Mail & Guardian had revealed how telecoms firm Neotel agreed to pay letterbox company Homix R104 million in what were also termed “commissions” – clearly kickbacks – to land Transnet contracts.

Our exposé at the time showed that a Gupta man was behind Homix. Immediately after the exposé, Neotel’s chief executive and chief financial officers went on “special leave”, ultimately to lose their jobs.

Two possibilities present themselves: Either SAP ignored the obvious red flags about the Guptas’ alleged involvement as fixers at Transnet, or it signed up for exactly the same service.

In a settlement with the US Securities and Exchange Commission last year, SAP agreed to pay a $3.9 million fine after a senior SAP official paid bribes for state business in Panama via a local partner.

The SEC had jurisdiction because of SAP’s secondary listing on the New York Stock Exchange.

The road to closure

Even for questionable commission agreements, 10 percent appears to be high. One industry insider put the usual “fixer” fee at closer to two or three percent. With the Neotel deals, Homix was to receive roughly five percent of the roughly R2 billion Transnet contract value.

But SAP not only wanted a Transnet deal worth a minimum of R100-million, it wanted it signed within just one month.

In an attached timeline of deliverables, referred to in the commission agreement as the “Road to Closure”, CAD House and Choubey were expected to secure a meeting with Transnet chief financial officer Garry Pita within just three days to “position the financial benefit” of SAP’s proposal.

After that it was not a sales effort, but one simply of getting Pita and Transnet to give the necessary approvals. The timeline provided that Pita would have the required R100 million-plus “budget reallocated for capital approval” only a week later.

By 21 September 2015, a month after SAP signed the commission agreement, CAD House was expected to “fast track and attempt to obtain contract signature” from Pita and Transnet’s chief information officer – although it had leeway until the end of December still to qualify for the commission.

While there is scant information in the agreement about how CAD House would work such a miracle, the agreement – in common with many commission contracts – contained extensive anti-bribery clauses, making CAD House promise that it would not pay any money in turn to government, state owned company or party officials.

But the circumstances suggest this was little more than a fig leaf.

Fronting for the Guptas

The evidence suggests that CAD House was interposed as a front to avoid exactly the kind of red flags that the Guptas as politically connected persons would have raised during a due diligence.

For a company with a turnover of less than R20 million and struggling to make any profit at all, the prospect of millions in commission should have been a major development.

Yet, #GuptaLeaks minutes of monthly CAD House meetings straddling the date of the commission agreement make no mention of the expected windfall. The meetings, at Gupta holding company Oakbay Investment’s Sandton offices, were attended by both Sahara and CAD House officials and discussed revenue-generating proposals for the latter.

A CAD House budget signed off in February 2016 – six months after the commission agreement was signed and shortly before SAP’s payments were to start rolling in – made no mention of the income either.

As we shall see, this was with good reason: SAP’s payments were not to stay with CAD House, but flow straight out to other Gupta companies.

Although SAP vehemently defended the decision to hire CAD House, Pillay and Govender seemed unable to explain why a company that sells 3D printers was an ideal partner for a complex software deal.

“We were doing a proof of concept and CAD House was an existing vendor at Transnet and we were looking at doing 3D models for these guys to show them the value and the benefit of using our solution,” Pillay told us.

When pushed for further detail of what SAP product required it to be modeled in 3D, Pillay said: “[The deal] was about Transnet in terms of the rail infrastructure, the way the operations work, the yards, the trains – all of that these guys were able to do the necessary 3D modelling as well as being able to position the SAP solution.”

Vetted

When we pointed out that CAD House’s speciality is selling printers that make physical 3D models, Govender deflected: “At the end of the day they [CAD House] were vetted internally and externally; SAP was happy that they added value; [Transnet] was happy that they added value… Look you have the CFO and SAP head of legal in front of you… If you need more technical detail you don’t have the right people in front of you.”

There are compelling reasons to be skeptical of SAP’s explanation:

One, Pillay signed the commission agreement on behalf of SAP and would surely have been privy to why SAP was giving away 10 percent of a minimum R100 million deal.

Two, If SAP honestly did want plastic models of its software solution it could have bought them at a fraction of the cost.

And three, despite Pillay maintaining that SAP engaged CAD House because of its “existing relationship [and] understanding the processes within Transnet”, Transnet denied it had any relationship with CAD House whatsoever.

Pita, the Transnet chief financial officer and “Road to Closure” target of SAP and CAD House’s lobbying efforts, wrote in reply to our questions: “According to our records, Transnet has not conducted business with CAD House. I have never heard of CAD House or dealt with them, nor have I had any discussions with a Mr Choubey about them.

“I have never been approached by CAD House or Mr Choubey to discuss Transnet’s contract with SAP or SAP’s services and products. I have not met with any third party to discuss contracts between Transnet and SAP.”

All in all, a more plausible explanation for the payments to CAD House may be that SAP willingly entered into a kickback agreement where both parties knew the Guptas, not CAD House, were to receive SAP’s millions and use their politically-derived influence to secure business for SAP. This is supported by what happened in the run-up to the deal.

The start of a beautiful friendship

The #GuptaLeaks show that Lawrence Kandaswami, SAP South Africa’s managing director, was the software multinational’s key contact with the Guptas.

As far back as 2014, when he was still SAP’s account director responsible for Transnet, Kandaswami exchanged emails with Choubey, who used his Sahara Systems email address.

At the time, SAP was trying to close a separate deal with Transnet to buy SAP Hana, a database management product.

A day after meeting with Transnet, Kandaswami forwarded Choubey the SAP presentation marked “strictly confidential”, detailing the proposed deal.

Kandaswami’s message read: “This is to prompt movement on the opportunity.” Choubey immediately forwarded the email to Salim Essa, with a note saying: “Sir – FYI – Supporting for Hana from SAP.”

Essa, a key Gupta lieutenant, has often been the family’s most direct point of contact at Transnet and Eskom.

The #GuptaLeaks do not show what Essa did after receiving Kandaswami’s email but Transnet confirmed that it agreed to go ahead with the proposed SAP Hana deal in late 2014.

By February 2015, Kandaswami had been promoted to SAP South Africa’s head of public sector, according to his LinkedIn profile. Both Transnet and Eskom’s accounts were now under his purview.

There are indications that a similar role was played at Eskom too.

On 17 February 2016, the #GuptaLeaks show, Choubey scheduled a meeting between Sahara and SAP. Two weeks later, on 2 March, Kandaswami emailed Eskom chief financial officer Anoj Singh, head of procurement Edwin Mabelane and head of generation Matshela Koko about an urgent deal for Eskom to acquire SAP Hana.

The offer would expire, he warned, at the end of March unless Eskom seized the opportunity.

In a pattern that has now become familiar, Kandaswami almost immediately forwarded this email to Choubey, who forwarded it to one of the Gupta brothers’ adult children.

Eskom spokesperson Khulu Phasiwe confirmed that Eskom signed two contracts with SAP during 2015 and 2016, but declined to provide any further detail citing a confidentiality agreement signed with SAP.

Shortly after these exchanges took place, Kandaswami was promoted to managing director for SAP South Africa.

R99.9m payday

Following the signing of the Transnet commission agreement, the money started flowing to CAD House – and straight out again.

The first SAP payment we know about landed in CAD House’s bank account in April 2016. The R17 million did not stay there long; on the same day R2 million was transferred out to Sahara Computers and R2.3 million to an obscure Eastern Cape company whose owner we have been unable to trace.

Within five days another R10 million was transferred out: R9 million to Sahara Computers and a million to Baroda, the Guptas’ bank of choice.

A similar pattern was repeated that July when R9.2 million came in from SAP. Within two days, R7.7 million bounced to Sahara Systems and R1.1 million to the Eastern Cape company.

In December that year, a massive R73.7 million rolled in from SAP. Within a fortnight, R71.1 million had gone out to three companies in the Sahara orbit: Cutting Edge, Futureteq and Sahara Systems.

All in all, we identified R99.9 million in SAP payments of which only R5.7 million did not flow straight out.

The amount appears not to relate only to the R100 million minimum Transnet contract that was the subject of the commission agreement we know about. Pillay and Govender confirmed that SAP paid CAD House in respect of “other customers” too, but refused to give details, citing client confidentiality.

This pattern, of money being cycled through Gupta-controlled accounts at a rate that defies all commercial reason, has become familiar through the #GuptaLeaks.

When we put it to SAP that it may have become party to a money laundering scheme by contracting with CAD House, Govender objected strongly, saying: “We are not aware of any payments being made to Sahara or anybody else. Our contract is with CAD House.”

Pillay added: “What the partner does with their money I have no control over. If you say these guys pass the money up the line, I have no control over that, I have no visibility over that.”

SAP may end up having to explain that to the Securities and Exchange Commission too, which will have SAP on a watch list after last year’s settlement over bribery in Panama. In that matter, the SEC found that SAP “failed to devise and maintain an adequate system of internal accounting controls” to prevent bribery.

Transnet did not respond to questions other than to mirror Pita’s comments, saying it had “never conducted any business with CAD House. The company is not aware of CAD House’s involvement with SAP or Mr Choubey”.

Detailed questions were sent to SAP’s Kandaswami and Sahara’s Choubey, but neither responded.

In a written statement, Govender said: “SAP is dedicated to conducting every aspect of our business responsibly and in accordance with the highest legal standards… With regard to CAD House and SAP SA Business Development Partners in general, please note that any selected SMMEs and/or partners are verified, both in terms of SAP’s rigorous internal forensic procedure as well as by an independent forensic law firm.”

By AmaBhungane and Scorpio for News24

Ramaphosa takes off the gloves in fight to lead SA

Deputy President Cyril Ramaphosa has taken the gloves off in the contest to become the nation’s next leader, delivering a scathing speech criticising “the rot” and widespread patronage plaguing the ruling African National Congress.

Ramaphosa stopped short of openly declaring his candidacy to succeed President Jacob Zuma, 75, in a speech on Sunday, but his address left no doubt that his campaign is now firmly under way. He made several thinly veiled attacks on Zuma, who’s indicated that he’s backing his former wife and mother of four of his children, Nkosazana Dlamini-Zuma, for the top post.

Dlamini-Zuma, who’s spent the past few weeks traversing the country drumming up support while guarded by the presidential protection unit, took an early edge in the race to succeed Zuma as ANC leader in December while Ramaphosa had run a subdued campaign, said Ralph Mathekga, an analyst at the Mapungubwe Institute for Strategic Reflection, a Johannesburg-based research group.

“It’s becoming clear that he wants the position of party president,” Mathekga said. “He’s become more decisive and could inflict damage to the campaign of Zuma’s preferred candidate.”

A lawyer who co-founded the National Union of Mineworkers, Ramaphosa, 64, helped negotiate a peaceful end to apartheid and draft South Africa’s first democratic constitution. He lost out to Thabo Mbeki in the contest to succeed Nelson Mandela as president in 1999 and went into business, securing control of the McDonald’s franchise in South Africa and amassing a fortune before returning to full-time politics in 2012 as the ANC’s deputy leader.

Gordhan’s firing

Appointed as the nation’s deputy president in 2014, Ramaphosa has spent much of his tenure defending the ANC and government in the face of a series of scandals implicating Zuma. He publicly disagreed with his boss for the first time this month after Zuma fired Pravin Gordhan as finance minister, prompting S&P Global Ratings and Fitch Ratings to downgrade the country’s credit rating to junk.

In his speech delivered at a memorial service for the late South African Communist Party leader Chris Hani, Ramaphosa backed a recommendation by the former graft ombudsman that a judicial commission investigate if members of the Gupta family, who are friends with the president and are in business with his son, unduly benefited from state contracts and tried to influence Cabinet appointments. Zuma and the Guptas have denied wrongdoing.

“The allegations that there are private individuals who exercise undue influence over state appointments and procurement decisions should be a matter of grave concern to the movement,” Ramaphosa said. “These practices threaten the integrity of the state, undermine our economic progress and diminish our ability to change the lives of the poor.”

Mcebisi Jonas, the former deputy finance minister who alleged that the Guptas offered him a promotion in exchange for preferential treatment, also spoke at the memorial service.

‘Pretend rules’

ANC rules discourage members from openly lobbying for leadership posts, and say they should await nomination from its branches before declaring their availability. Several senior party leaders have called for the regulations to be changed.

“We know those are ‘pretend rules’ and nobody actually plays by them,” said Susan Booysen, a professor at the University of the Witwatersrand’s School of Governance. “The rules are there to protect the incumbent and their chosen successor.”

The ANC has won more than 60% of the vote in every national election since it took power in the first multiracial one in 1994, placing its next leader in pole position to become the nation’s next president in 2019 when Zuma is due to step down. The party will hold its internal elections at a December 16-20 conference in Johannesburg.

Anger, disappointment

“Ramaphosa realises that this is the moment to come out because there is general support for him and it comes in the context of anger and disappointment and people wondering why on earth he has not come out to declare his candidacy,” Booysen said.

Ronnie Mamoepa, Ramaphosa’s spokesperson, said he couldn’t comment on party matters.

Dlamini-Zuma, 68, had an early edge in the succession battle, according to 11 of 26 analysts surveyed by Bloomberg on February 13 and 14, while 10 put Ramaphosa ahead, and five said the contest was too early to select a front-runner.

Ramaphosa still faces major obstacles in his bid for the ANC’s top job. While he’s received the support of the main labour federation, Dlamini-Zuma has the public backing of the ANC’s Women’s League and part of the party youth league, and can expect the endorsement of three premiers of three rural provinces known as the “premier league” who are allied with Zuma.

Marikana killings

There was a public uproar in 2012 when Ramaphosa made a failed R19.5m bid for a buffalo cow and calf at a game auction, a move opposition parties said was scandalous given the country’s enduring poverty.

The killing of 34 protesters by police at Lonmin’s Marikana platinum mine in 2012 following days of violent strike action also dented Ramaphosa’s image. While he called the labour action “dastardly criminal” in an email a day before the shooting and urged police to take “concomitant action”, a commission of inquiry cleared him of wrongdoing. A company he led had a stake in the mine.

Under Zuma, the ANC suffered its worst electoral performance since the end of apartheid in municipal elections in August, losing control of Pretoria, the capital, and the economic hub of Johannesburg.

While Ramaphosa still needs to build his support base, the fact that he’s made it clear he’s in the race should bolster his chances, according to Mathekga.

“People can see he is a real option,” he said.

By Amogelang Mbatha and Mike Cohen for www.fin24.co.za

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