Cyril’s McEmpire revealed

2012-12-09 10:00

His private interests will be inappropriate for a deputy president

Cyril Ramaphosa’s business empire presents a raft of conflicts of interest as he eyes a renewed political career that could soon see him elected as ANC deputy president.

Ramaphosa’s nomination for the party’s deputy president spot at its upcoming elective conference in Mangaung, and the likelihood that he will find an office in the Union Buildings in the near future, casts new light on his interests.

Since retreating from active politics in the late 1990s – although remaining an ANC national executive committee member – Ramaphosa has thrown his energy into building a business empire that makes him one of the wealthiest black businessmen in South Africa.

His net worth was estimated recently by the authoritative Forbes Magazine at some R2.4 billion, which also calculates his “net worth over time” to be more than double that.

The former trade unionist and former ANC secretary-general’s riches have been built through the Shanduka Group, in which his family trust maintains a reported 30% stake, that he founded in 2001, after leaving Parliament in 1996, initially to become deputy executive chairman of New Africa Investments.

Shanduka’s tentacles extend to most major sectors of the economy – from finance and mining to energy, property and food.

Alone, Ramaphosa has, or has had, well over 150 directorships in a plethora of concerns, according to company register records.

Ramaphosa’s business prowess was crowned last year with him securing the main rights as South Africa’s “developmental licensee” for fast-food restaurant chain McDonald’s – for many the epitome of Western capitalism and a deal loaded with irony for the former labour-union firebrand.

His network of associates through these corporate entities number in the thousands and include the who’s who of South Africa’s business elite – connections that experts say already sound a warning bell for possible conflicts of interest in the future.

Dr Deon Rossouw, the chief executive of the Ethics Institute of South Africa, said: “The moment Ramaphosa starts showing an interest in a position in government, it starts a conflict of interest.

“It is absolutely necessary he clears his position as soon as possible. He should make an announcement as soon as he decides to accept the nomination to become deputy leader of the ANC and, as a result, the deputy-president of the country.”

Shanduka holds stakes in numerous South African blue-chip corporations such as Standard Bank (1.2%), MTN (0.45%) and Bidvest (he has an 18.46% stake in the consortium that owns 3.6% of Bidvest).

Shanduka’s interests give Ramaphosa a non-executive directorship of Standard Bank, chairmanship of the boards of Bidvest and MTN, and co-chairmanship of Mondi Plc.

His myriad interests have already raised claims of a conflict of interest, most recently in a deal last month when Shanduka acquired a minority stake in MTN Nigeria.

Critics point to Ramaphosa’s position as chairman of both companies on either side of the transaction as a problem, even though it was technically legal.

Ramaphosa’s mining interests are also loaded with political gunpowder, as his involvement with Lonmin recently illustrated.

Ramaphosa is a board member of Lonmin through Shanduka’s 50.3% stake in Incwala Resources, which owns interests in the miner’s operations here, including the Marikana mine, which was the site of the deaths of 34 miners in a police shooting in August.

Ramaphosa found himself in a political crossfire with the disclosure of emails to another Lonmin executive, where he appeared to support strong action against the miners prior to the shooting and for which he was publicly vilified.

It’s the kind of criticism his interests will inevitably attract.

Rossouw said: “Ramaphosa is, for example, the chairperson of MTN and he cannot hope to retain that position because that would be a conflict of interest.

“The state regulates the communication industry and therefore he cannot be seen to be involved in MTN in any way. He will have to leave that position and others, and put his assets in a blind trust.”

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