Sunday, August 15, 2010

Hello Banana republic our tickets are booked____Great piece by Mondli Makhanya

Hhawu! We're all aboard the runaway bus heading for the banana republic

Mondli Makhanya: This week must go down as the week we finally boarded the bus to a place called the banana republic.

It may be quite a distance to go still, and we may yet be able to turn the bus around, but what we do know is that we are certainly on board that bus to the republic of the damned.

Our seats on the bus were confirmed by the most nauseating business deal in recent memory, when a bunch of politically connected individuals were paid handsomely for a mine they filched and also scored a lovely R9-billion stake in steel giant ArcelorMittal.

A brief recap for anyone who may not have been following this intriguing and dirty saga:

Some months ago the big shots at ArcelorMittal simultaneously fell asleep at their desks and forgot to convert prospecting rights at the Sishen iron ore mine to new order rights as required by the law.

It was a technicality that could have been fixed had there been a will on the part of the authorities.

The state then automatically took over these rights, leaving ArcelorMittal at sixes and sevens.

Kumba, Arcelor's major supplier of iron ore and owner of another section of Sishen, took advantage of this situation and hiked the price of the iron ore that the steel maker was buying from it.

When the ArcelorMittal guys woke up to smell the stale coffee on their desks, they scrambled to get their rights renewed and accused Kumba of bad form. The matter has been in arbitration for months.

The ensuing bitter battle between the two dominated the business media. It was lovely stuff for our tribe as there are few things in the world as entertaining as corporate fisticuffs.

In the meantime, a little-known entity called Imperial Crown Trading (ICT) moved in.

Before anyone could say "Hhawu!" ICT had miraculously been granted the ArcelorMittal portion of the mine by the Department of Mineral Resources.

It was a brazen move that would have put André Stander and Collin Chauke to shame.

In this posse that took the mine was President Jacob Zuma's 28-year-old son Duduzane, whose mining experience is as extensive as Bryan Habana's top-order batting. With him were the Gupta brothers, who own the Sahara IT company and who are now seemingly the president's new best friends.

Duduzane's twin Duduzile, who also boasts Habana's cricketing experience, sits on the Sahara board. The Guptas, who arrived in South Africa in the '90s, enjoy special access to the nation's number-one citizen.

It is said that a lot of the wild giggling and wide grinning on the president's part these days is due to his relationship with the Guptas. Members of the business delegation that accompanied Zuma on his state visit to India were very frustrated at the attention he lavished on the Guptas, who monopolised the president at the expense of the other businessmen.

So at any rate, the Zuma/Gupta crew was sitting pretty and were ready to mint money.

Little did we know that the ArcelorMittal lot was meeting these ICT characters in dark corners hatching this week's despicable deal.

In essence, what happened this week was that ArcelorMittal paid R800-million for ICT's ill-gotten stake in Sishen. AND ... AND ... included the ICT fellows in an empowerment deal worth R9.7-billion.

The stake, for a 20% share in the steel maker's South African operations, also includes Sandile Zungu, one of Zuma's closest allies in the business world.

"It is money for jam," Zungu told Business Report. "Who would say no to that?"

So there you have it. You take someone's stuff. Then the someone pays you to get it back and gives you a healthy bonus on top of it.

Even the very upright Nonkululeko Nyembezi-Heita, CEO of ArcelorMittal, put on a straight face as she defended something that she knew was pungent.

She went on and on about how she had to find "solutions" and stressed that everything was done within the parameters of domestic and international statutes.

The best quote from her came in an in interview with Moneyweb's Alec Hogg. When, after she had provided a comprehensive and almost convincing argument, Hogg put it to her that this was a "strange country to do business in". Her short reply was: "Your words Alec, not mine. I'm just paid to find solutions to problems, and sometimes you do things that under other circumstances you might not do, but it is what it is."

So it is what it is then. Perhaps one day, when we have reached the republic of banana we will look back on this deal and wonder why we did not read the sign telling us what direction our bus was taking.

And honest people like Nyembezi-Heita will realise how complicitthey were in pointing the bus in that direction.

Yes, the deal was legal, as Nyembezi-Heita correctly pointed out. But that did not make it right. She knows it was probably the most hideous decision of her life.

Oh, and by the way, the day after the deal was signed President Zuma ordered a probe into corruption in government departments. Go figure.

Original Story timeslive/Hhawu--Were-all-aboard-the-runaway-bus