Right to reply: A good governance lesson for all

2012-12-16 10:00

Shanduka Group, a black-owned and black-managed investment holding company, recently announced the acquisition of a minority stake in MTN Nigeria.

The R2.9?billion deal is the largest investment the group has made outside South Africa and is a significant development in the evolution of economic empowerment in South Africa.

But questions were raised in the media about a potential conflict of interest arising from the fact that Shanduka’s executive chairman, Cyril Ramaphosa, is also the chairman of MTN Group. Reference was also made to a relationship between the chief executives of Shanduka and MTN Group. As one report put it, the deal “raises eyebrows”.

Shanduka welcomes such scrutiny in the spirit of stimulating public discussion about society’s expectations of business.

From the outset, as is standard practice in deals of this sort, Shanduka engaged the services of legal firms in Nigeria, Mauritius and South Africa to ensure the transaction complied with laws and regulations in all three jurisdictions.

However, in the wake of subsequent comments in the media, the company sought legal opinion on the specific corporate governance issues that had been raised.

This was to test the validity of the criticisms made by various commentators in the media and to ensure that Shanduka continues to uphold the highest standards of corporate governance.

The opinion given was that neither Shanduka nor Ramaphosa nor Shanduka’s chief executive breached any law or principle of good corporate governance. But eyebrows were nevertheless raised.

This holds an important lesson for any company. While it might not be a breach of law or a violation of the standards of good corporate governance, measures should be taken to avoid even the perception of a conflict of interest.

It is unfortunate that the significance of Shanduka’s investment was to some extent overshadowed by raised eyebrows. But then, even the harshest scrutiny is better than allowing lax corporate governance practices to continue.

»?Moharir is managing director of energy and infrastructure at the Shanduka Group

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
Comments have been closed for this article.

Inside News24

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


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.


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.