Pieter du Toit

Radical economic transformation and the return of Johann Rupert

2018-11-02 07:00
Johan Rupert sê pres. Jacob Zuma moet bedank. Foto: Cornel van Heerden

Johan Rupert sê pres. Jacob Zuma moet bedank. Foto: Cornel van Heerden

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His vilification as the embodiment of "white monopoly capital" has left Remgro and Richemont chairperson Johann Rupert disillusioned about South Africa. But President Cyril Ramaphosa's call to treat entrepreneurs as "heroes" might just entice him to lend a hand, writes Pieter du Toit.

Johann Rupert was a very pleased man after Richemont, the Swiss-based luxury goods firm he heads, signed an agreement with Chinese online retail giant Alibaba last month.

"This could be a big game-changer for us," the chairperson of the Richemont board said this week. The Richemont-Alibaba joint venture will see the establishment of luxury goods portals on Alibaba’s giant trading platform and will give the Rupert-controlled company access to one of the world’s largest and fastest growing markets.

The deal was sealed in early September at dinner in Rupert’s London home after a meeting between him and Daniel Zhang, who took over the reins as Alibaba CEO from the respected Jack Ma. Richemont, with brands such as Cartier, Alfred Dunhill, Van Cleef & Arpels and Mont Blanc in its stable, will now have much more than a mere foothold in China and the East. Its partnership with Alibaba will instantly make it a major player in the Chinese market. And the expanding Chinese luxury market is where you want to be.

STELLENBOSCH, SOUTH AFRICA ? JUNE 20 Remgro's offi
Remgro's offices in Stellenbosch. (Photo by Gallo Images/Foto24/Denzil Maregele)


Richemont, that has been in constant rivalry with another European luxury powerhouse LVMH (Moët Hennesy-Louis Vuitton), will now be able to launch a proper foray into e-commerce and look to spread its old world class to new markets. It is sure to boost the multibillion dollar company’s earnings even further.

Some weeks before the Alibaba deal was finalised Rupert was in New York where he received the Appeal of Conscience Award alongside managing director of the International Monetary Fund, Christine Lagarde, who he considers a good friend (she nominated him for the légion d'honneur, France's highest civilian accolade).

At the prize giving ceremony held at the Ritz Carlton, Henry Kissinger, former US secretary of state, introduced Rupert while the citation lauded his philanthropic efforts in South Africa, where he invests heavily in the arts, education and social wellbeing of communities in Stellenbosch and Graaff-Reinet in the Karoo, where his father Anton was born and where he still owns a farm. The award was specifically made to recognise his efforts with the Laureus Sport for Good Foundation, the Nelson Mandela Children’s Fund and the Peace Parks Foundation.

In between his visit to New York and concluding the Alibaba agreement in China (stopping over in Singapore, a city-state whose efficiency and cleanliness impresses him no end) he hosted the Alfred Dunhill Links Championship in the UK, which apart from the Open Championship is one of the most prestigious professional golf tournaments on the European Tour, with rock stars, actors and sports heroes playing alongside touring professionals.

But in South Africa Rupert and his family are treated as pariahs by the ruling political class, branded as the embodiment of white monopoly capital and part of an alleged global capitalist cabal seeking to exploit workers as much as they can.

In reactionary and radical circles his surname has become synonymous with the worst excesses of capitalism and he has almost become a caricature of big, bad white business.

Only two weeks ago Julius Malema, the leader of the EFF, for the umpteenth time railed against Rupert and the so-called Stellenbosch Mafia while theorising about fantastical conspiracies. And Andile Mngxitama, a peripheral political figure with aspirations to take his brand of anarchy to parliament next year, beats the Rupert drum whenever he gets a chance. He even led a protest march to the head office of Remgro, the diversified investment firm Rupert also chairs. 

In 2016 and 2017 Rupert was a prime target of the Bell Pottinger-Duduzane Zuma disinformation campaign largely waged on social media. His face was appended to photoshopped images showing him meeting with Thuli Madonsela, an avowed enemy of the state capture project, cavorting with certain journalists and, as part of an Illuminati-like organisation, pulling the strings of ministers like Pravin Gordhan. The purpose of the campaign was to draw attention away from rampant corruption, a failing state and the dire state of the economy and to position Rupert – and others – as the real reason why poverty, inequality and unemployment remain stubbornly high.

Not that Bell Pottinger and Zuma Jr. really cared, they just wanted to draw away fire and what better way to do that than to combine race with privilege?

Rupert was one of the very few business leaders who spoke out against the misrule of former president Jacob Zuma, and after the Nenegate disaster in 2015 implored him to resign "for the sake of our children". In 2017 he said that Zuma’s exhortation of "radical economic transformation" was nothing but "a code word for theft".


President Cyril Ramaphosa receives a courtesy call
President Cyril Ramaphosa receives a courtesy call from Mr Jack Ma, founder of the Alibaba Group, ahead of a conference in Johannesburg in August 2018. (Elmond Jiyane, GCIS)

He explains that run-ins with the ruling class is nothing new and that the apartheid government was adept at bullying by, for example, blocking import permits during the 1980s. "At a dinner of the Urban Foundation once Magnus Malan (minister of defence under PW Botha) openly threatened me in front of the late Gavin Relly, saying that they (the National Party government) will 'break Rembrandt', and that 'politics is a cut-throat business, and I mean that literally'."

The "white monopoly capital" campaign has left Rupert disillusioned and bruised. He remains fiercely loyal to the country, but it is clear he has his doubts about the direction it is headed in. He has known President Cyril Ramaphosa since the early 1990s and they formed a good relationship in 1994 and 1995, when then-president Nelson Mandela established a working group to help revamp the country’s labour legislation.

But Rupert is not convinced that the damage of the last decade can be reversed as easily as it was wrought. "The investor community needs to see results. They want to see all forms of corruption being prosecuted, both in the private and the public sector. There must be action," he says.

Those close to Rupert say he until recently believed himself to be "toxic" to Ramaphosa and his cause, that even though he’d want to respond to the president’s call to build the country it would be politically impossible.

Rupert is a world citizen. He has interests in many countries and friends and acquaintances from Zurich to London, New York to Washington, DC and now in Huangzhou, China.

When fund managers on Wall Street want to understand what South Africa’s prospects are, they call Rupert. Or when big government bondholders in Europe worry about their returns, they ask him. When institutional investors in the UK want to understand the lay of the land, they pick his brain.

After Ma’s Alibaba found a partner in Rupert’s Richemont, the Chinese magnate came to Ramaphosa’s investor conference in Sandton extolling the virtues of entrepreneurship and private enterprise. And Ramaphosa responded, saying: "We should treat our entrepreneurs as heroes."

Rupert has been cast as a villain. But maybe Ramaphosa’s call can entice one of the world’s most influential businessmen back to help.

Read more on:    remgro  |  alibaba  |  richemont  |  julius  |  cyrial ramaphosa  |  johann rupert  |  malema  |  jack ma  |  geneve  |  new york  |  london  |  stellenbosch
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