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SA business ‘corrupt to core’ — BEE pioneer
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Edward West
Business Day
Thursday, April 22, 2010
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CORRUPTION in South African business stems from its historical culture of being closed to the world, said Sekunjalo Investment Group executive chairman Dr Iqbal Surve.
He said at a conference on corporate governance in Cape Town yesterday that his experience in the more than 10 years since starting the empowerment investment group was that South African business was “corrupt to the core”.
Surve said Sekunjalo, a listed black-owned group with more than 130 investments, was among the first black economic empowerment (BEE) groups on the JSE and had managed to survive where many others had failed. This was as it had worked hard to maintain its core values against “great challenges and temptations”.
There were 36 empowerment listings at one stage. Only five truly black-owned companies remain.
Surve said he had been privileged to travel with SA’s three black presidents on various state visits and to meetings of captains of industry, and that he was frequently amazed when very large international companies approached him to say, “We would like you to be our partner”.
One would imagine the initial response to be “where do I sign,” but Surve said he always asked “why”.
“Corruption is a two-way thing ... often big business stands silently by in the expectation of corruption. We would rather lose a big contract than be corrupt,” Surve said.
“It is not governments that are corrupt, it gets corrupted.
“Who is the guilty party, the BEE company that has nothing to put into the deal, or is it established business that seeks favour through these relationships?”
Many South African business leaders were still stuck in the culture of getting a “quick buck here and there” through favours, Surve said.
He said Sekunjalo’s business values were to be purpose driven, people centred, profitable, in partnership, pro-poor, pro-development and environmentally sustainable.
He said Sekunjalo had through the years become more and more environmentally conscious and had for instance, “single-handedly changed the fishing industry” as it had been corrupted through over-fishing for many years before.
“This was at the beginning. We have evolved ... Sekunjalo’s business model will be a model for economies in the next 20-50 years,” he said.
Phil Armstrong, head of the Global Corporate Governance Forum based in Washington, US, a multidonor trust funded founded by the World Bank and the Organisation for Economic Co-operation and Development, said corruption was estimated to cost African Union countries $140bn a year — about 25% of the gross domestic products of sub-Sahara Africa countries.
Of 47 African countries, 31 had scored less than three out of 10 in terms of the variables of the Transparency International index.
A three out of 10 score signified endemic corruption.
Out of the 47 countries, only three countries had scored more than five. These were Botswana, Cape Verde Islands and Mauritius.
SA scored among the “others,” Surve said.
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