Gold fields: Where heroes fall like skittles

2013-09-15 10:00

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Ferial Haffajee believes Gold Fields’ BEE story has the wrong ending.

Can there be a deal more like a spaghetti western than the Gold Fields BEE deal?

If I were a film producer I’d option it as a swashbuckling but cautionary tale of South Africa’s high life and its loss of innocence.

Heroes fall like skittles and the bad guys win.

There’s high-level politics, hustlers, Zuma lawyers and middlemen.

It adds grist to the mill of the loud anti-BEE lobby.

It makes us look B-grade. It is a cocktail of shenanigans, hustle and cowboy frontier capitalism.

Here’s how it starts.

Enter Nick Holland, the chief executive of Gold Fields. Government is getting hungry and angry – the face of the mining industry looks much like it did when Cecil John Rhodes started the precursor to Holland’s gold multinational: lily white.

Holland needs blacks, but where would he find BEE partners? If

you look at Gold Fields’ executive committee, it is a challenge to employment equity laws.

By my count, Holland has two black South Africans and a Ghanaian reporting to him, while the rest are white men of a certain age and culture.

I think it is the way of large parts of corporate South Africa – you choose inner circles who look like you.

My guess is Holland had no black networks and did not move easily in a black world, so finding a BEE partner was a bit of a hassle.

The company’s previous empowerment partner, Tokyo Sexwale’s Mvelaphanda Resources, has left Gold Fields scrambling after it unbundled its stake in the company.

So, enter stage left, Gayton McKenzie.

A charismatic hustler, former bank robber and ex-convict, he proves a great alter ego to Holland.

Redhead and baldhead hit it off, becoming house friends.

“Don’t worry,” McKenzie tells Holland, “I’ll find you a BEE partner.”

As you and I know, this isn’t hard in a majority-black country; but for Holland, I imagine, McKenzie is like a supersized pack of Grand-Pa powder – he takes the headache away.

McKenzie puts together a deal that reads like a movie script.

For access, he puts President Jacob Zuma’s advocate, Jerome Brauns, on retainer.

The well-known bagman Brian Mosehla, who worked with Mvelaphanda, delivers the political clout: former parliamentary speaker and now ANC chairperson Baleka Mbete.

The new R2.1?billion deal comprises an employee share option scheme, which receives 10.75% of Gold Fields SA and benefits 47?100 employees.

The rest of the deal goes to a broad-based BEE ­consortium consisting of 73 individuals (the deal’s most suspect part), the South Deep Education Trust and a South Deep Community Trust, who together hold a 9% stake in South Deep’s operations and an additional 1% of Gold Fields international.

The present imbroglio, as detailed in the Mail & Guardian, is about whether Mbete was bribed by Gold Fields, and whether she made Mosehla up her stake more than tenfold.

But that’s only one part of the tale. While this deal is being made, it seems Gold Fields chairperson Mamphela Ramphele is asleep in the expensive mahogany boardroom.

The deal is signed while she’s in charge.

After Ramphele quits Gold Fields, she drops a bombshell: government pressurised the company to choose certain partners.

Because Gold Fields has operations across the world and has bigger global ambitions, it institutes an inquiry by New York law firm Paul, Weiss, Rifkind, Wharton & Garrison.

The lawyers do their work and find the deal does not pass muster of US anticorruption laws.

They say Holland may have bribed a political office bearer. Pan back to the Sandton mahogany boardroom.

This time, an awake chairperson is at the table. It’s boardroom legend and former freedom fighter Cheryl Carolus.

She reads the report, pushes her glasses to the tip of her nose, looks around the room at her board and instructs: “Can it. Destroy all copies. Sue the Mail & Guardian. Dock Nick’s bonus. Issue a statement.”

They issue a statement, which, in effect, tells its public to go take a hike up a mine dump.

Forget about global standards of corporate transparency and the fiduciary duty of directors to good governance.

Forget about the inherent risk or the battering of the share price.

The Securities and Exchange Commission, a US regulator, says it is investigating Gold Fields. Back home, Gold Fields rides the storm and a largely pliant financial media lets it.

Everyone gets to keep their ill-gotten millions.

The mining industry’s reputation takes another hit, but Holland’s red head calms.

He got away with the docking of an R8.4?million bonus, a nudge and a wink.

But being a lover of happy endings, I might rewrite the end.

Carolus pushes her glasses to the tip of her nose, looks around the room at her board and instructs: “Nick must go. Now. Cancel the deal. I know how to do it better. Put out the Paul Weiss report to the public – there’s a lesson there in how not to do BEE. It gives our country and industry a bad name.”

Over at Luthuli House, Mbete reads the Mail & Guardian in horror and thinks: “I don’t need this. I get a deputy president’s salary for life (she was deputy president for a short while after Thabo Mbeki was fired and Kgalema Motlanthe held the fort as president) and my involvement in the deal sends a bad message.”

She gets ANC spin doctor Jackson Mthembu on the line. “Jackson, get a statement out, buti. I’m returning my Gold Fields shares. I don’t need them and it gives our government a bad name.”

The end.

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