Anglo American – Big Business sees the Light

It has been reported that Anglo American is refusing to hand over 60% of the shares in its New Largo coal mine, the anchor supplier of coal to Kusile power station.  Anglo is willing to sell such shares on commercial terms, but not simply to hand them over to a Black Empowerment partner.  Anglo American is to be congratulated on this stance.  The company has long been an admired corporate citizen, and this refusal to knuckle under to ANC pressure restates the reasons why it has gained its reputation for corporate integrity.

It seems that Big Business is finally growing a backbone, and refusing to roll over under the ANC’s Black-mail.  If we examine the practice of Black Empowerment, it shows up as what it really is – no less than blackmail and theft on a grand scale.  In the vast majority of cases, the Black partners add nothing to the business.  They are parasites, sucking the lifeblood of South African and foreign entrepreneurs and industry, adding significantly to the cost of doing business, and contributing nothing.  It is the civic responsibility of every South African to reject such Black-mail.

In one case, the details of which are known to the writer, the Department of Mines demanded that a substantial shareholding in an operating mine be handed over to one of a shortlist of three Black (ANC) nominees.  When the Managing Director asked what would happen if he chose not to do that, he was told that ‘We will tax you out of existence”.  The mine had been abandoned years before a group of foreign investors purchased it and resuscitated it, investing large amounts of money.  The mine could have been purchased at any time by a Black entrepreneur, who, if he had the entrepreneurial spirit that the foreigners possessed, could have brought it into operation and enjoyed the benefits and the fruits of his efforts.  None did.  The Managing Director told the Department of Mines officials that a sale of a shareholding on normal terms would be welcomed or, if the intending purchaser had any skills, experience or qualities other than an ANC connection to offer, the company would entertain some method of funding the purchase.  He refused to hand over the shares on the normal basis, which amounts essentially to a gift to a favoured person.  Not surprisingly, a couple of weeks later, a notice was received cancelling the mining licence, citing spurious grounds.  That was defeated in a High Court case.  Not too long after, a VAT inspection by SARS took place, followed by an assessment imposing a penalty of R21 000 000 for failure to pay VAT on exports.  That was a clear violation by SARS of the VAT Act, and an objection was lodged against the assessment.  During the waiting period, the bank accounts of the company and all other companies which had a common Director were frozen by order of the Reserve Bank.  An application to the High Court succeeded in having the accounts unfrozen, as the action had been illegal.  Shortly after that success, the Attorney conducting the cases was appointed as Collection Agent by SARS, which required him to hand over to SARS all funds received from or on behalf of the company.  This action effectively deprived the company of the ability to defend itself in law!  A method was found to pay the legal fees, and the Attorney then received a demand from SARS to hand over to SARS all documentation relating to the company.  His reply, that the documentation was protected by legal privilege and so would not be handed over, elicited the response from SARS that they would conduct a VAT inspection of his practice and ‘make his life a living hell’.  He continued the action, which the company won, achieving a retraction of the assessment, followed a day later by an identical assessment for R18 000 000!  The performance continued over the next three years, with the assessment being fought and lifted, and new assessments being imposed every six months for the next three years.  At the end of the process, the investors closed the mine, removed the equipment they had installed, much of it new technology invented by them, and withdrew their investments from South Africa.  They have since made sure that every possible investor they knew might be considering investing in South Africa came to know the full extent of the criminality conducted by the South African Government and its arms.  The loss to South Africa since then has certainly been in excess of several billion dollars of new investment.

The demands made by Eskom for a 60% shareholding by Blacks in New Largo before it will sign a contract for the purchase of coal for Kusile is nothing less than simple criminal blackmail.  It detracts from the public benefit of the public investment in Kusile, adding to the risks of continuing inability of Eskom to meet the power needs of the country, and adds to the cost of that power.  It is the sort of conduct that the public has come to expect from President Zuma and his cronies in the ruling Party.  It is an example of the Nkandla syndrome.  This cabal is prepared to put the economic wellbeing of the citizens of the country on the line for its own benefit.  The policy has had the effect of driving inflation, reducing GDP, adding to the massively high unemployment in the country. 

It is common knowledge that Anglo American is actively withdrawing from South Africa, joining the ranks of dozens of other leading-edge companies which are no longer willing to accept the costs and indignity of submitting to the illegal acts of the ruling Party, so attractively wrapped in the appearance of the ‘good of the previously disadvantaged’.  Paying a bribe to someone for the purpose of gaining a Government contract is criminal and reprehensible, no matter the form it takes.  The sale of 20% of Shell SA to the ANC investment arm, probably to ensure the granting of the Karoo fracking licence is certainly a transaction that screams to any fair-minded person, demanding to be investigated, in South Africa and in its home country.  The appointment of ANC-connected persons to the Boards of listed companies must equally be suspect.

If you need a reason for the thrashing about of the ANC in order to retain political power, the probable (legitimate) of these items of graft, corruption and influence-peddling is it.  If the DA wins the next election, all of these deals must be investigated as a high priority, in order to put the country firmly in the ranks of those countries that abhor Government-sponsored criminality.  The top ranks of the ANC should be very concerned.