Guest Column

How state capture fuels corporate corruption

2017-12-12 09:20


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Wayne Duvenage

Corruption is corruption, is corruption. It's no different if it takes place in the private or public sector.

The laws in dealing with the corrupt apply equally to all, if applied consistently.  So it came as a surprise to many on hearing Minister David Mahlobo of the ANC's Peace and Stability Committee, bemoaning his perception that corruption is handled differently and more leniently for leaders in the corporate sector. If his perception is factually correct, one must ask why this is so.

The shocking reality is that too many leaders – both in government and the private sector – are getting away with 'murder' when it comes to the many clear cases of gross corruption and fraudulent conduct, especially when backed by substantive evidence.

Let me not dwell on the lack of action against numerous corrupt politicians and state company executives responsible for robbing our nation of billions.

Many cases with substantive evidence to qualify these public servants for long jail sentences have been filed with the enforcement authorities, who in turn have suffered a morality bypass and failed to act without fear or favour. Consequently, many a corrupt public servant is allowed to roam freely within society, to flaunt and enjoy the millions they have siphoned from the tax payer. That's a given. It's grossly wrong. But it's a fact, courtesy of our president and state capture.

But what about the corporate sector, with many cases of business leaders so steeped in the corruption controversies getting off scot-free, or with a light 'wrap on the knuckles' as Mahlobo puts it?

Why are the commercial crimes and general enforcement authorities not throwing the book at these corporate transgressors and locking the guilty players behind bars? The lethargy to act is mind boggling, or maybe not.

A closer look at some of the 'dropped' opportunities will explain why this softly-softly approach to corporate corruption is directly linked to state capture. 

A classic and recent example is that of the collusion uncovered in the construction industry, whereby substantive evidence and statements implicated major construction companies in cartel style fleecing of the state with overpriced stadiums and roads.

These cases were a slam dunk for the commercial crimes and general enforcement departments, along with other oversight bodies such as the Construction Industry Development Board (CIDB) who could have, and should have gone all the way to put numerous construction industry leaders behind bars.

Instead, a 'wrap on the knuckles' by way of a relatively punitive fine and an agreement with the state to transform and develop the industry was meted out.

One of the main reasons why the construction cartel was 'let off the hook' was because on the other side of the corruption coin in this case, were the state and SOE leaders who participated and facilitated the corrupt conduct. They were the ones who approved government to pay the highly inflated costs related to the construction projects, and the connected middlemen, agents, consultants all cashed in big time. 

The state's quandary when the collusion was exposed, was that a relentless activity of prosecution against these private sector corruptors would have exposed the politicians, middlemen and SOE leaders linked to this mess.

This explains largely why government enforcement agencies, including the CIDB, chose to look away. That, Mr Mahlobo, is why the corporate sector gets away lightly in so many of these clear cut cases of corruption.

In any other country where the rule of law applies without fear or favour, many construction company leaders and politicians by today would have been spending their third or more year behind bars in this matter.

There should be no silence when it comes to corruption. Civil society will sing and shout loudest when the state leaders are robbing society of their hard earned taxes, and by the same token, the state will (or at least should) sing and shout loudest when the private sector robs the state or other private sector entities of their hard earned money. 

The harmony of all the sectors of society singing in sync when tackling corruption will blissfully unmask and lock up the perpetrators, and the fight against corruption will see massive results.

Civil society's relative silence on corporate corruption – when compared to state corruption – is by no means an endorsement of their conduct. On the contrary, we urge the state to leave no stone unturned on the Steinhoff, KPMG, McKinsey and similar matters. We also long to see corporate leaders suffer the consequences of their unscrupulous actions, including long jail sentences. 

We therefore urge the state to thoroughly investigate and act against leadership of Naspers, MultiChoice, the SABC and ANN7 if found guilty for their part of what appears to be fraudulent conduct to influence the state's TV encryption policy.

And if this investigation leads them to include the politicians within the state's Communications Department, throw the book at them as well. But if their political masters won't allow them to do so, then I'm afraid, once again it will be a wrap on the knuckles for the Naspers leadership and that, Mr Mahlobo, is the sad reality and by-product of state capture. 

- Wayne Duvenage is the CEO of Outa.

 News24 is published by Media24. Both Media24 and MultiChoice are Naspers companies.

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

Read more on:    david mahlobo  |  state capture  |  corruption  |  kpmg  |  steinhoff

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