Ministers: In trusts we trust

2011-09-24 21:08

South Africa’s top politicians have put their trust in trusts.

A database of trust records held by the justice department and the ­register of parliamentarian’s interests shows at least 20 of the country’s top elected officials have significant ­interests in trust funds – often opaque financial vehicles which are not readily open to public scrutiny.

Several of the trusts are charitable, where the ministers and deputies hold positions as trustees or stewards of good causes.

Trust funds are coming under ­scrutiny in the wake of revelations about ANCYL leader Julius Malema’s secret Ratanang Family Trust and how it was allegedly used to dole out state tenders to pals through a ­company which the trust part owns.

At present, codes of conduct for ministers and parliamentarians don’t formally require them to declare such interests, although there’s an unwritten agreement between political parties that if a trustee benefits financially from a trust, it should be ­declared.

Parliament’s code of conduct is set to undergo a review “in the next few months”, Parliament’s registrar of members’ interests Fazila Mohamed told City Press.

An investigation by City Press shows that of the country’s 66 ministers and deputy ministers, at least 18 are linked to trust funds. In addition, Deputy President Kgalema Motlanthe and speaker Max Sisulu also have interests in trusts.

According to the database, former businessman and Minister of Human Settlements Tokyo Sexwale has the most extensive interests, with four trusts linked to his name. Officials in his office failed to respond to repeated requests for comment.

Unlike company records which are publicly accessible, information about the membership, purpose and financial affairs of trust funds are held by the Master of the High Court. Access to these records is not open to the general public, making it ­virtually impossible to scrutinise ­independently.

Aaron Roup, secretary of the Fiduciary Institute of South Africa, indicated that as a rule, only trustees or persons authorised by trustees, are allowed ­access to records and written permission is needed to examine the records.

Mohamed said members of Parliament are “advised that if they are a beneficiary of a trust, as opposed to simply being a trustee, the benefits are required to be disclosed”.

“If you own massive shareholdings through a trust, the shareholdings must be disclosed. Many people own property-bearing trusts and that property must then be disclosed.”

In their responses to queries by Media24 Investigations, several ministers responded that they had not ­declared their interests in trusts as they were not required to make ­declarations while others said they were not beneficiaries.

“The most problematic area is conflicts of interest between the functions of the trust and an official who could benefit from them. Tenders are an obvious example,” said Derek Luyt from the Public Service Accountability Monitor. “It is also difficult to establish the interests of officials in a trust, given the more lenient standards of financial accountability compared to other company structures.”

Luyt said the ethics codes were not on their own an effective tool to keep public servants accountable, as disclosures were “almost impossible” for police to ascertain.

“The main problem is how to verify that disclosures of conflicts of interest, gifts and financial interests are accurate. This can be very difficult, not only in the case of trusts.

“It is almost impossible to measure the extent of patronage.”

A review of the current ethics codes was announced shortly after Public Protector Thuli Madonsela called for clearer guidelines in a report on her ­investigation into President Jacob ­Zuma’s delay in declaring interests.

This review is now being undertaken by the justice department, whose spokesperson Tlali Tlali did not respond to requests for comment.

Judith February, head of Idasa’s ­Political Information and Monitoring Service, said the fact that President Jacob Zuma started his term by ­declaring his own interests late set an “unhelpful precedent”.

She said that unless government heeded the public protector’s calls, “the effectiveness of the codes will ­remain in doubt”.

“We have a situation?.?.?.?where members don’t comply with the ­provisions of the ethics codes, there are no adequate sanctions to serve as a deterrent and there are no legal ­requirements for the auditing of the executive branch asset disclosure forms except at the Auditor-General’s discretion.”

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.