JOHANNESBURG (Reuters) &#8211; South African Deputy President Cyril Ramaphosa, a leading contender to become head of the ruling ANC in December, stepped up his criticism of the government on Sunday, saying state-owned companies had been “captured” and funds looted from them.
Ramaphosa’s remarks during a speech to an African National Congress meeting in the old diamond-mining town of Kimberley were tougher than others he has made on government graft, signaling the issue will be a main theme of his campaign.
He also took aim &#8212; without naming them &#8211; at the wealthy Gupta family, friends of President Jacob Zuma who have been accused of using undue influence to win lucrative state contracts. Zuma and the Guptas have denied any wrongdoing.
“Many of these state-owned enterprises have been captured by certain people, by a certain family,” Ramaphosa said.
“All of our state-owned enterprises have been captured and we are saying we want to see an end to state capture and the money that has been stolen, we want it back,” he said, to roars of approval from the audience.
South Africa’s top prosecutor said on Wednesday police were examining a trove of leaked documents detailing relations between the Guptas and Zuma, but it was too early to say if a prosecution should be launched.
Ramaphosa said in May that South Africa was in danger of becoming a “mafia state” and he took a swipe in July at the Guptas over media reports that state funds were diverted in 2013 to pay for a lavish Gupta family wedding.
But Sunday’s remarks about a “certain family” were more pointed and come as the race heats up for the ANC’s top spot. The next head of the party, who will be selected in December, will be its presidential candidate in 2019 national elections.
Ramaphosa’s main challenger, veteran politician and Zuma’s ex-wife Nkosazana Dlamini-Zuma, will next week be sworn in as a member of parliament, a move which could see the former minister brought back into the cabinet, raising her profile.
Analysts say she has the backing of Zuma’s well-established patronage network as well as organisations such as the party’s Women’s League.
Ramaphosa is a trade unionist-turned-business tycoon who has the backing of a diverse group of unions, communists and investors who do not always see eye to eye but want to rid the ANC of Zuma’s influence and legacy.
The opposition has long accused Zuma of sleaze and influence-peddling while in office. He survived a no-confidence vote in parliament on Aug. 8 but 30 ANC lawmakers voted with the opposition, indicating deep divisions in the party that has dominated South African politics since the end of apartheid in 1994.

SA’s state-owned companies had been “captured”: Ramaphosa

Duduzane Zuma, the son of South Africa’s President, said on Thursday there was “nothing untoward” about his links with the Gupta brothers &#8211; businessmen accused of using their friendship with his family to win contracts.
Duduzane told the BBC in a rare interview he had built up his own ties with the Gupta brothers purely through being “a likeable guy”.
“I’ve not involved myself in any corrupt practice, in any corrupt business,” he said.
The Guptas &#8211; a family of Indian-born businessman &#8211; have dismissed accusations by members of the ruling African National Congress party of using their link to the president to boost their businesses that span mining and technology and have government contracts.
President Jacob Zuma has faced calls to resign from the opposition and also within the usually united ANC over the relationship and the allegations of influence wielding that have shaken the government and markets. He has also denied any wrongdoing.
The main opposition Democratic Alliance (DA) party has said Duduzane helped produce a racially-charged PR campaign backing his father while he was working for Oakbay Resources, which was controlled by the Guptas.
The DA based its allegations on tens of thousands of leaked emails released by investigative journalists &#8211; though one of the Gupta brothers, Atul Gupta, said this month the emails were fake.
Duduzane said in April last year he would sell his investments in a mining firm owned by Oakbay Investments &#8211; a holding company for Gupta businesses in South Africa.
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Reporting by James Macharia; Editing by Andrew Heavens
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Zuma’s son: ‘Nothing untoward’ about links to South Africa’s Guptas

Bonang Mohale, the Chief Executive of Business Leadership South Africa (BLSA), this morning launched #BusinessBelieves in South Africa campaign.
The campaign takes aim at the White Monopoly Capital (#WMC) propaganda that was allegedly peddled by the Guptas and their former PR company Bell Pottinger.
SEE BLSA STATEMENT BELOW
Mohale said BLSA members are committed to economic transformation, so that the country works for everyone, summing up his organisation’s values in an historic six-point ‘Contract with South Africa’ – which includes a focus on job creation, inclusive economic growth, empowering black business and crushing corruption.
Mohale said: “Business Believes in South Africa. South Africa’s future and our future as businesses are inseparable. We want the transformation so many in this country need so desperately. We share the values set out in its constitution. And we say humbly: we want to play our part in ensuring that South Africa works for everyone.”
He went on: “We are fighting back against the falsehoods of the White Monopoly Capital campaign and we are asserting business as a positive force in the life of this country.”
He argued: “Too many people are still living low quality lives – denied the fair chance that Madiba demanded on their behalf. Too often the dream of an equal South Africa has been betrayed. Our society continues to be ravaged by unemployment, poverty, nepotism and corruption.”
Mohale called on all political parties and civil society to make inclusive economic growth their priority, saying: “Because business believes when the economy is strong, South Africa is strong.”
Bonang Mohale and Nicky Newton-King, CEO of the Johannesburg Stock Exchange (JSE), signed the following contract on behalf of the BLSA Board and Council.
BLSA CONTRACT WITH SOUTH AFRICA 
<ul>
<li>Create jobs by growing the economy.</li>
</ul>
Between 1993 and 2015, South Africa’s private sector created 2.65 million jobs (Source: World Bank). Our aim is to create even more jobs.
<ul>
<li>Encourage and empower senior black leadership.</li>
</ul>
Ultimately, the best way to close the opportunity gap is to invest in more businesses owned, run by, and employing black South Africans. We pledge to grow a new generation of black business leaders and entrepreneurs.
<ul>
<li>Invest in South Africans</li>
</ul>
South Africa can only meet the challenges of the future with a highly-skilled workforce.
We will train South African managers and workers for the challenges ahead.
<ul>
<li>Invest in communities.</li>
</ul>
Business owes it to South Africans to do more to ensure the communities in which they operate thrive and prosper.
<ul>
<li>Support small businesses.</li>
</ul>
They should be the lifeblood of our economy &#8211; but too often they struggle. It is our duty to help them succeed by financing new businesses, training and mentoring entrepreneurs for success.
<ul>
<li>Condemn and root out corruption 
Corruption and state capture are the cancers that are eating away at our society. They must be rooted out, crushed and punished where we find them in the public or private sector.</li>
</ul>
Mohale also said: “Corruption and state capture are the cancers eating away at this society. We cannot create the conditions for inclusive growth in the face of state capture and corruption. Everyone who cares about this country must cry, ‘Not in my name!’ wherever they see evidence of corruption, whether in the public or private sector.”
He accepted there were areas where business needed to clean house – committing to and signing an Integrity Pledge, where BLSA members have zero tolerance of corruption – but pointed out the bigger problem was in Government: “We cannot grow our economy when these are the cancers eating away at our country. They must be rooted out and crushed.”
To create the policy environment necessary for favourable conditions for the economy to grow and succeed, “we need to see our commitment matched by government and labour, and BLSA will work with these stakeholders to map out a clear path to prioritise job creation and inclusive economic growth.”
“Only by upholding this contract that we have made today, will we ensure that the South Africa of Nelson Mandela’s dream – where everyone prospers &#8211; will become a reality,” concluded Mohale.
&nbsp;

Business Leadership South Africa launches campaign that fights #WMC propaganda

Gupta-controlled Oakbay Investments has sold its shareholdings in Infinity Media and TNA Media to Mzwanele Manyi&#8217;s Lodidox and management for R450 million.
Manyi was the former CEO of GCIS and Cabinet spokesperson.
The Guptas first announced their intention to <a href="http://cnbc.africa/news/southern-africa/2016/08/27/guptas-to-exit-s-a-businesses/">exit their shareholding in all their South African businesses in August 2016</a> saying that the sale would be complete by December that year, this did not happen.
In a statement Oakbay said:
&#8220;The transaction comprises: 
• The sale of Oakbay’s shareholding in Infinity Media, which operates the ANN7 News Channel, for R300 million; and 
• The sale of Oakbay’s two-thirds stake in TNA Media, the publisher of The New Age newspaper, for R150 million. 
&#8220;The agreement is expected to be concluded over the next few weeks, subject to any regulatory requirements. 
&#8220;The sale is part of Oakbay’s commitment to preserve jobs and provide certainty to over 7500 hard-working employees throughout the group and to safeguard the inherent value of the businesses in which they work.&#8221;

Guptas sell media assets to Mzwanele Manyi’s Lodidox, management

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Today the Democratic Alliance presented its evidence against Bell Pottinger in the Public Relations and Communications Association&#8217;s disciplinary hearing into the embattled PR firm&#8217;s conduct.

DA awaits ruling of the Bell Pottinger disciplinary hearing

A South African court denied on Friday an application by former finance minister Pravin Gordhan for an order that would block the ministry from any involvement in a dispute between banks and the Gupta family, businessmen accused of influence peddling.
Standard Bank, Nedbank, FirstRand and Barclays Africa last year closed the bank accounts of companies controlled by the Gupta family following accusations they had undue influence over President Jacob Zuma and the issuing of government contracts.
Gupta-owned companies asked Gordhan, an outspoken critic of Zuma and the Gupta family, to intervene and force the banks to reopen their accounts, prompting him to ask the High Court to declare it was outside of the remit of his ministry.
A Pretoria high court called Gordhan&#8217;s application unnecessary, local media reported.
Zuma and the Guptas have denied any wrongdoing.
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Reporting by TJ Strydom; Writing by Joe Brock; Editing by Ed Cropley
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South African court denies Gordhan protection in Gupta, bank dispute

Mills Soko | University of Cape Town
South Africa is reeling from a string of scandals involving state owned enterprises and the Guptas, a family with close ties to President Jacob Zuma. A trove of recently leaked Gupta emails exposed the involvement of prominent businesses in the extensive corruption networks. Sibonelo Radebe asked Mills Soko to explain the implications of the scandals.
What do you make of the situation?
If nothing else, the Gupta leaks have shown us how perilously close South Africa is to losing everything so many people fought so hard for. Not only does corruption divert capital allocated for public services away from the poor, it hollows out important state institutions and, ultimately, frays the social and economic fabric of the country. It threatens the hard won democracy and political stability.
The ongoing revelations around state capture and patronage are giving South Africans an unprecedented and frightening glimpse into the machinery of corruption. The most unnerving element of the emails is how many of the transactions appear blatant and almost casual. The absolute cynicism and lack of ethics revealed in this correspondence is breath taking.
What we do with this knowledge as a country is going to count for everything. As a business community we can look away and call these tales of corruption isolated incidents – or we can step up to ensure that our organisations hold themselves to a higher standard. Most critically the law must take its course.
What does it tell us about the role of business?
The emails remind us that in any corrupt interaction it takes two to tango. And while governments and public money are so often at the centre, the enablers of corruption are not in government but in the private sector.
With the Gupta’s at the centre of the rot, prominent international companies like accounting firm KPMG, consulting giant McKinsey, ICT player SAP, engineering company Liebherr and capital equipment manufacturer Shanghai Zhenhua Heavy Industries have been implicated in the mounting scandal. It’s worrying to see that companies of such calibre can be involved in such nefarious activity.
Corruption is, of course, not a new phenomenon – and nor is it unique to South Africa, as the Global Corruption Index shows. But certainly, the scale of what is going on in South Africa right now is unprecedented.
How do you rate the responses by the implicated businesses?
Companies have scrambled to distance themselves from the reputational firestorm that the Gupta leaks have unleashed. McKinsey acted promptly to suspend Vikas Sagar, a director in its South African office, to allow an internal investigation to proceed. For its part SAP, which originally denied the allegations, has similarly suspended South African staff while launching a full anti-corruption investigation , which is to be carried out by a multinational law firm and overseen by its executive board member Adaire Fox-Martin.
It’s convenient to blame these incidents on bad apples. But this doesn’t get below the surface of what is really going on. The scale of the corruption and the apparent ease with which it has been unfolding speaks to the fact that something is very wrong with the system. And it highlights an utter lack of business ethics and governance failures. This isn’t something the country can afford.
What should be done to root out the corruption?
While all of this may seem overwhelming, what is unfolding also presents the business community with an opportunity for some introspection. Calls have been made for greater purpose and responsibility on the part of South African leaders.
But how can we make sure these fine words and intentions are internalised? How do we make sure as a country that our business as well as our state institutions are committed to not allowing this to happen ever again?
Educational institutions, business schools in particular, are positioned as a first-line duty in making sure that graduates are equipped to recognise and reject corruption in any form. The country needs business leaders who are committed to building sustainable and profitable businesses but who are also mindful of their social and ethical obligations.
Citizens as workers and consumers also have a significant role to play. As individuals working in companies and purchasing goods and services from companies, they can condemn unethical behaviour from companies. This was partly reflected in how the general public put pressure on Bell Pottinger the UK based public relations firm which did work for the Gupta’s.
By rounding on Bell Pottinger, effectively causing the company to lock its Twitter account and issue a formal and unprecedented apology to the country (even though they also blamed the fiasco on bad apples rather than the system), South Africans have shown the power they can wield when united against wrongdoing.
But the country needs to go further. While government and business have not enjoyed the best relationship in recent times, they need to bury the hatchet and come together to fix the inequalities in this country. Deep divisions have laid South Africa open to the kind of racist exploitation that Bell Pottinger unleashed.
Until the country rights this situation, it will continue to remain vulnerable to these kinds of nefarious influences. South Africa needs to be united in the spirit of building a country that works for everyone – not just a select few. Things are broken, yes – but it’s not impossible to repair the damage.

South African business must own up to its part in the corruption scandals

One of South Africa&#8217;s Gupta brothers said leaked emails suggesting his family used links to President Jacob Zuma to win contracts and influence decisions were fake, a rare intervention in a scandal that has rocked the government.
Atul Gupta &#8211; whose family business empire spans media, mining and technology &#8211; told the BBC he had no idea where more than 100,000 documents and emails released in the media since June had come from.
&#8220;There&#8217;s no authenticity of Gupta leaks at all,&#8221; he said, without suggesting who might have forged them or addressing specific allegations in the paperwork.
Senior members of the ruling African National Congress party have accused the three Gupta brothers of using their relationship with Zuma to wield influence and win business.
Media reports based on the emails have drawn several international firms into a scandal that has prompted politicians to call for a judicial enquiry and Zuma&#8217;s resignation.
Zuma and the Guptas have denied wrongdoing. A family spokesman last month said the allegations were false and part of a &#8220;blatantly political campaign&#8221;.
<h3 data-reactid="44">Pr Campaign</h3>
Atul Gupta said his family also had no role in a publicity campaign by London-based public relations firm Bell Pottinger that cast enemies of Zuma as agents of &#8220;white monopoly capital&#8221;.
The slogan, aired frequently on a Gupta-owned television station, quickly gained traction in a country where the white minority still wields disproportionate economic clout two decades after the end of apartheid.
Deputy President Cyril Ramaphosa and opposition members have said the campaign inflamed racial tensions.
&#8220;I don&#8217;t know what this narrative comes from. White monopoly capital, if you go research any revolutionary speech in this country, always existed. I don&#8217;t know where any of these terms come from, believe me,&#8221; he told BBC Radio 4&#8217;s World at One show on Tuesday.
The leaked emails suggested Bell Pottinger worked with Zuma&#8217;s son, Duduzane, who was then a director at a subsidiary of the Gupta-controlled Oakbay company, to create a &#8220;narrative that grabs the attention of the grassroots&#8221;.
Bell Pottinger ended its work with Oakbay in April and last month apologised for the campaign and fired a partner in charge of it.
The firm is also under investigation by Britain&#8217;s Public Relations and Communications Association (PRCA) after a complaint from South Africa&#8217;s main opposition party, the Democratic Alliance (DA).
&#8220;It wasn&#8217;t an intention to play with race, it was an intention to highlight a very real issue,&#8221; Bell Pottinger&#8217;s Chief Executive James Henderson told the BBC.
&#8220;Knowing what I know now, clearly in hindsight, they (the team) got involved in a situation which was much more political than clearly had been anticipated by them at the time.&#8221;
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Reporting by Nqobile Dludla; Editing by James Macharia and Andrew Heavens
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Gupta brother says South Africa influence peddling emails are fake

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Following complaints by several parties including the Democratic Alliance, Bell Pottinger will be appearing before the UK&#8217;s Public Relations and Communications Association on charges that it stirred racial tensions in South Africa.

UK regulator probes Bell Pottinger for fuelling racial tension in SA

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One hundred and fifty civic organisations from around the country met at the Rhema Bible College today to attend the Future of South Africa conference, which aims to unite and mobilise the country against state capture.

Vavi speaks out on SA’s battle with looters & state capture

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SAP has initiated an independent investigation into allegations that it agreed to pay a 10 per cent &#8220;sales commission&#8221; to a company controlled by the Guptas to clinch business from Transnet.

SAP to probe South Africa kickback allegations

Enterprise application software provider SAP has initiated an independent investigation into allegations that it agreed to pay <a href="http://amabhungane.co.za/article/2017-07-11-guptaleaks-software-giant-sap-paid-gupta-front-r100m-kickbacks-for-state-business">10% “sales commission” </a>to a company controlled by the Guptas to clinch business from Transnet.
The New York Stock Exchange listed company is governed by <a href="https://www.justice.gov/criminal-fraud/foreign-corrupt-practices-act">The Foreign Corrupt Practices Act, </a>which prohibits such practices.
SAP&#8217;s probe will be spearheaded by a multinational law firm and overseen by Executive Board Member Adaire Fox-Martin, who will  vigorously review contracts awarded by SAP South Africa.
SAP has also launched an internal review and will make the results of the investigation public once it is concluded.
READ: <a href="http://cnbc.africa/news/political/2017/07/13/state-capture-probe/">SA’s Public Protector wants an urgent inquiry into state capture</a>
In a statement SAP said &#8220;Consistent with company policy, SAP has brought in senior expert staff across all relevant functions while the current management team has been placed on administrative leave pending the findings of the review&#8221;.
Fox-Martin is currently travelling to South Africa to address the concerns of customers, partners and employees.
The SAP (Global) interim team are expected to arrive from Germany tomorrow morning.

SAP to investigate Gupta corruption allegations

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It seems as though President Jacob Zuma has dodged yet another attempt to get him removed from office with the Constitutional Court ruling that the issue of MPs voting in secret is the prerogative of the speaker of parliament.

Is state capture South Africa’s new normal?

Statement by SA Department of Public Enterprises
Dr Ben Ngubane has resigned with immediate effect as Non-Executive Director and Chairperson of the Board of Eskom.
“Dr Ngubane formally tendered his resignation, which I accepted,” Minister of Public Enterprises, Lynne Brown, said.
<blockquote>“I would like to thank Dr Ngubane for his contribution to turning Eskom around since the load shedding days of 2014/15, and wish him well in the future.
“To ensure continuity at Eskom, I have decided to appoint Mr Zethembe Khoza as interim Chairperson until I am able to take new Board appointments to Cabinet for approval,” Minister Brown said.</blockquote>
Eskom’s AGM is scheduled to take place later this month.
http://cnbc.africa/zdnl-mc/2017/06/02/eskom-rescinds-molefe-appointment/
Responses to Ngubane&#8217;s resignation 
Statement by  the Democratic Alliance’s Natasha Mazzone MP &#8211; Shadow Minister of Public Enterprises
The Democratic Alliance has noted the late-night resignation of Eskom Board Chair, Ben Ngubane, hot on the heels of damning revelations of the capture of Eskom leadership by the Guptas, and the breakdown of corporate governance at Eskom.
Mr Ngubane, who presided over the retrenchment/retirement/rehire of Brian Molefe as Eskom CEO has much to answer for, not least of which includes Molefe’s R30 million ‘golden handshake’ deal and an avalanche of accusations that the Guptas have milked Eskom over many years.
Ngubane’s resignation will not exonerate him from liability for the breakdown of governance at the Power Utility, and the DA will use the Parliamentary Inquiry into Eskom, set to commence on 21 June, to hold Ngubane to account.
Allegations by former Mineral Resources Minister, Ngoako Ramatlhodi, that Brian Molefe and Ben Ngubane tried to strong-arm him to withdraw Glencore’s Optimum mining licences in order to guarantee that the Guptas takeover Glencore’s coal mines is yet to be probed, and may still find Nguabne guilty.
Additionally, the Matshela Koko R1 billion nepotism scandal, which occurred on Ngubane’s watch, is yet to be fully probed too.
Ngubane has also recently been implicated in falsifying documents in a liquidation case.
We find the clandestine hour of Ngubane’s resignation announcement to be highly suspicious.

Eskom Chairman Ben Ngubane resigns

TJ Strydom | JOHANNESBURG
The former head of South Africa&#8217;s power utility Eskom has approached the courts to overturn his sacking, local media reported on Sunday.
Eskom was told to remove chief executive Brian Molefe last week after members of the ruling African National Congress criticised his reinstatement just two weeks ago, given he resigned last year amid allegations of graft.
Molefe has launched an urgent application in the Labour Court in Johannesburg to have the decision to remove him declared invalid, the Timeslive website reported.
Eskom and Public Enterprises Minister Lynne Brown were listed as respondents, the report said. Neither Eskom nor Brown&#8217;s spokesman could immediately be reached for comment by Reuters.
Molefe resigned in November after a report by the Public Protector, a constitutionally mandated corruption watchdog, raised questions over Eskom coal contracts awarded to a company owned by the Gupta family, wealthy friends of President Jacob Zuma.
Zuma&#8217;s opponents said Molefe&#8217;s return was a new attempt to access contracts worth hundreds of millions of dollars. Government ministers have said the Guptas have offered to secure them promotions in return for tenders.
Zuma and the Gupta family deny wrongdoing. Molefe also denies any wrongdoing and said he resigned in the first place in the interest of good governance and stability.
(Reporting by TJ Strydom)

South Africa power utility’s former CEO to challenge sacking in court

TJ Strydom
South African President Jacob Zuma has denied owning a &#8220;palace&#8221; in the United Arab Emirates, his office said on Sunday, after local media reported that an influential family bought him a home in the wealthy Gulf state.
Graft accusations in more than 100,000 leaked documents and e-mails last week heaped more pressure on the scandal-plagued Zuma only days after he survived a no-confidence vote by members of his own party&#8217;s top body.
South Africa&#8217;s Sunday Times newspaper reported that several independent sources had told it that the Gupta family had bought Zuma a retirement home for 330 million rand ($25 million) in an upmarket suburb of Dubai.
The newspaper did not name the sources, but said they included businessmen, senior officials in the ruling African National Congress and people close to the Zuma family. It also cited some of the leaked e-mails.
The Gupta family, wealthy Indian-born businessmen whose companies have contracts with state-owned firms, have denied all allegations of influence-peddling or improper dealings and through a spokesman last week labeled the e-mails &#8220;fake news&#8221;.
&#8220;President Zuma does not own any property outside South Africa and has not requested anybody to buy property for him abroad,&#8221; his office said in a statement, adding that the report about a &#8220;palace&#8221; in Dubai was a &#8220;fabrication&#8221;.
&#8220;The president has also not received or seen the reported emails and has no knowledge of them,&#8221; his office said.
South Africa&#8217;s anti-graft watchdog called in November for a judge to investigate alleged influence peddling in Zuma&#8217;s government and focused on allegations that the brothers, Ajay, Atul and Rajesh Gupta, influenced appointments of ministers.
Zuma is fighting the report in court and has not appointed a judicial commission to investigate. He denies any wrongdoing.
Last year, South Africa&#8217;s top court found that Zuma had failed to uphold the constitution by ignoring instructions to pay back some of the $16 million in state funds spent on renovations at his private home.
(Reporting by TJ Strydom; editing by Mark Heinrich)

South Africa’s Zuma denies owning ‘palace’ in Dubai

Many would like to consign the polarising debate about “white monopoly capitalism” <a href="https://mg.co.za/article/2017-01-27-00-when-a-catchphrase-trips-you-up/">(WMC)</a> in South Africa to the <a href="http://www.news24.com/MyNews24/why-white-monopoly-capital-is-irrelevant-20170407">margins</a>. They argue that its proponents are nothing more than Marxist ideologues or <a href="https://theconversation.com/white-monopoly-capital-an-excuse-to-avoid-south-africas-real-problems-75143">mischievous political manipulators</a>
But, even if we query the integrity of the term WMC, its introduction into South Africa’s contemporary discourse is indisputably good for the country’s politics.
Above all, it’s an urgent reminder that the <a href="https://theconversation.com/south-africa-needs-to-fix-its-dangerously-wide-wealth-gap-66355">inequalities</a> of wealth, income and <a href="https://theconversation.com/why-white-men-still-dominate-the-top-echelons-of-south-africas-private-sector-44873">opportunity</a> in this country are not only extreme but still highly racialised. It forces people to ask why, even under a black government, a <a href="http://www.statssa.gov.za/publications/P0302/P03022014.pdf">white minority</a> continues to dominate the most productive parts of the economy.
The extremes of racialised inequality in the country are not just an affront to social justice but are also politically explosive. Granted, the implementation of <a href="http://www.labour.gov.za/DOL/legislation/acts/employment-equity/employment-equity-act">employment equity</a> and Black Economic Empowerment <a href="http://www.dti.gov.za/economic_empowerment/bee.jsp">(BEE)</a> has somewhat <a href="https://theconversation.com/white-monopoly-capital-an-excuse-to-avoid-south-africas-real-problems-75143">ameliorated</a> racialised patterns of wealth and ownership. But, no one should be surprised when black people at the bottom of the heap get angry. Neither should people be surprised that there are politicians who, for reasons good and ill, are willing to exploit that anger and mobilise around it.
For the last twenty years, mainstream politics has talked a lot about addressing the extremity of inequality, but has done little about it. The governing African National Congress (ANC) has indulged in much <a href="http://www.anc.org.za/content/economic-transformation-commission-report">egalitarian rhetoric</a> while the opposition Democratic Alliance (DA) has targeted <a href="https://www.da.org.za/why-the-da/policies/job-business/economic-policy/">“equality of opportunity”</a>.
In practice, both have embraced the mantra that a rising tide in the economy will lift all boats. But, today the tide has long been out. The boats are stuck in the mud. And it’s taken the rise of the radical <a href="http://www.ujuh.co.za/flopping-bbbee-might-propel-radical-alternatives/">Economic Freedom Fighters (EFF)</a> to shake the major parties out of their complacency by espousing a revolutionary assault upon WMC.
That’s a major plus for the country’s politics. A serious conversation about the continued racialisation of wealth, inequality and poverty is needed. Yet the problem for the EFF, and those who simplistically target WMC, is the dismal nature of their sociology.
<h2>Monopoly capital under apartheid</h2>
White monopoly capital was at its most cohesive and concentrated during the late phases of apartheid. In 1981, <a href="https://zabalaza.net/.../who-rules-south-africa-an-anarchistsyndicalist-analysis-of-the-a...">over 70%</a> of the total assets of the top 138 companies were controlled by state corporations and eight privately owned conglomerate. These spanned mining, manufacturing, construction, transport, agriculture and finance.
Further concentration followed the mounting political crisis of the 1980s. Foreign companies disinvested and sold their assets locally. Unable to invest abroad during late apartheid, the conglomerates invested their excess capital by buying local assets that were often distant from their core business.
By 1990, just three conglomerates – <a href="http://www.angloamerican.com/">Anglo-American</a>, <a href="https://www.sanlam.co.za/Pages/default.aspx">Sanlam</a> and <a href="https://www.oldmutual.co.za/">Old Mutual</a> – controlled a whopping <a href="https://www.businesslive.co.za/bd/.../2013-11-24-unsexy-mutuals-seek-higher-profile/">75%</a> of the total capitalisation of the Johannesburg Stock Exchange (JSE). Given the overwhelmingly domestic and white nature of the ownership of these companies, as well as the astoundingly high level of concentration of capital in a handful of conglomerates, we could fairly – even usefully – refer to “WMC”. But things have changed considerably since then.
<h2>Changing corporate landscape</h2>
The democratic era that started with the ascension to power of the ANC in 1994 has seen major changes in a corporate structure which had historically revolved around a <a href="http://www.tandfonline.com/doi/abs/10.1080/03768359708439989">minerals-energy-complex</a> dominated by the major conglomerates.
The opening of the economy to the global market post-apartheid, led to major processes of <a href="http://www.tandfonline.com/doi/abs/10.1080/10108270.1996.11435064?journalCode=rsar19">“unbundling”</a>, as conglomerates shed their “non-core” assets in search of “shareholder value”. By 2016, <a href="http://salearnership.co.za/anglo-american-learnership/">Anglo-American’s share</a> of market capitalisation on the JSE had shrunk to as low as 15%.
In addition, foreign money poured in, some to purchase unbundled assets, some to invest in an expanding financial sector. Yet some simply sought to make short term returns from high interest rates. Correspondingly, the role of the banks and private investment institutions increased. By 2010, financial institutions (14%) – along with mining houses (37%) <a href="http://wiser.wits.ac.za/system/files/seminar/Southall2012_0.pdf">accounted</a> for over half of market capitalisation of the JSE by 2010. The economy was now dominated by a minerals-energy-finance-complex.
Alongside the growing financialisation of the economy, there has been a shift in racial patterns of ownership. At the end of apartheid, companies listed on the JSE were almost wholly owned by white South African investors. But, by 2016, (if we accept the calculations done by Alternative Prosperity) white South African ownership was down to just <a href="https://www.jse.co.za/articles/black-south-africans-top-100-companies-listed-on-the-johannesburg-stock-exchange">22%</a>.
Meanwhile, foreign ownership had leapt to 39%, black direct ownership (mainly through BEE schemes) to 10% and black indirect ownership (largely through pension funds) to 13%, with another 16% uncategorised.
Such statistics are always a matter of controversy. President Jacob Zuma recently insisted that black ownership of the JSE was as low as <a href="http://www.sanews.gov.za/south-africa/president-zuma-stands-jse-black-ownership-remarks">3%</a>. Yet the trend towards both greater foreign ownership and increased black ownership is indisputable. Three major issues follow.
<h2>Evolving ownership patterns</h2>
Large scale capital in South Africa is less monopolised and more diversified in its ownership than it was under apartheid (even if major corporates continue to dominate). It follows that the country needs to grasp how the nature of capitalism is changing. For a start, the growth in black pension funds reflects the strong upward <a href="http://ccs.ukzn.ac.za/files/Black%20Middle%20Class%20in%20SA3.pdf">movement of black people</a> into the higher ranks of the public service since 1994.
Even if we continue to refer to “monopoly capitalism” in these circumstances, it makes far less sense to refer to it, uncritically, as “white”. Yes, it’s probable that the major stake of foreign investment is ultimately owned (largely indirectly via institutional investments) by foreigners who are white. But, does this suggest that we would prefer that they were yellow or brown? Surely that takes us on to very shaky territory? Should we categorise the <a href="http://www.ujuh.co.za/guptas-exit-from-south-africa-signals-change-of-fortunes-for-zuma-but-this-war-is-much-deeper/">Gupta</a> empire – the politically-connected family at the centre of state captures – as “brown monopoly capitalism?”
Critics such as <a href="http://www.ujuh.co.za/the-chris-malikane-doctrine-white-monopoly-capital-myth-or-reality/">Prof Chris Malikane</a>, the economic adviser to Finance Minister Malusi Gigaba, have objected that the growth of black investment on the JSE is not significant. That’s because, they argue, black pension funds are largely controlled by white asset managers. And black direct investments via BEE schemes are largely funded through debt owed to white capital. These are certainly very real issues. But, is the main issue here the racial patterns of ownership and control – or the growing power of financial institutions and their lack of accountability?
All this means that it’s simply too crude, too simplistic and too out of date to depict the economy in broad brush terms as under the domination of white monopoly capital. The reality is more complex. It follows that suggestions that the decolonisation of the economy demands the nationalisation of WMC is profoundly bad economics.
The troubled experiences of South Africa’s state-owned enterprises such as <a href="https://theconversation.com/south-africa-must-free-itself-from-the-burden-of-owning-a-national-airline-64004">South African Airways</a>, <a href="https://theconversation.com/why-south-africas-power-utility-isnt-in-great-financial-shape-68441">Eskom</a> and <a href="http://www.fin24.com/Economy/petrosa-to-axe-staff-to-save-its-skin-20170505">PetroSA</a> do nothing to inspire confidence. What the economy might gain in terms of direct state ownership would be confounded by flight of capital and know-how. Class rule by capitalists would be replaced by class rule by state managers who would be no more accountable to ordinary citizens than their predecessors.
<h2>Innovative solutions needed</h2>
South Africa needs to devise far more inventive solutions than nationalisation to tackle the brutally unequal nature of its economy. Citizens need to pose profound questions about how to make international capital more accountable. They must ask questions about how to make the country’s corporate elite more accountable and how state capital can work productively with private capital while remaining responsive to local communities. And, yes, about how present patterns of corporate ownership can be not only de-racialised but democratised.
Yes, it’s a nice idea to think of overthrowing “white monopoly capital”, but we need to think very carefully of what we might replace it with!

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Guptas

SA’s state-owned companies had been “captured”: Ramaphosa

Zuma’s son: ‘Nothing untoward’ about links to South Africa’s Guptas

Business Leadership South Africa launches campaign that fights #WMC propaganda

Guptas sell media assets to Mzwanele Manyi’s Lodidox, management

DA awaits ruling of the Bell Pottinger disciplinary hearing

South African court denies Gordhan protection in Gupta, bank dispute

South African business must own up to its part in the corruption scandals

Gupta brother says South Africa influence peddling emails are fake

UK regulator probes Bell Pottinger for fuelling racial tension in SA

Vavi speaks out on SA’s battle with looters & state capture

SAP to probe South Africa kickback allegations

SAP to investigate Gupta corruption allegations

Is state capture South Africa’s new normal?

Eskom Chairman Ben Ngubane resigns

South Africa power utility’s former CEO to challenge sacking in court

South Africa’s Zuma denies owning ‘palace’ in Dubai

White monopoly capital: good politics, bad sociology, worse economics

News Tips

Advertise With Us

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