Ngoako Ramathlodi’s accidental mining shares: whose business is it anyway?
- Gushwell Brooks
- 30 Jun 2014 01:07 (South Africa)
Friday saw the release of the news that current Mineral Resources Minister, Ngoako Ramatlhodi, held shares in a mining company at the centre of the five month long platinum strike, whilst supposedly mediating to bring an end to the labour action.
His spokesperson spent most of the day trying to explain the ‘misunderstanding’ these media reports had caused and went to great lengths assuring everyone who brought the matter up, that the minister had foregone his mining interests. I respect the proactivity of Advocate Mahlodi Muofhe, Ramatlhodi’s spokesperson. He picked up the phone every time someone raised the contentious issue on air and I should admit, he should be credited in his attempts to divert from the issues at the crux of the debate and his assurances that it was all a big mix up.
But the revelation that the minister was both referee and player in the most contentious and protracted strike in the history of South African labour, raises a very important question, one that needs to be addressed head-on and as soon as possible. The question quite simply is; should politicians in office have business interests in the private sector?
Being an idealist, the answer is very simple; of course not, the conflict of interest minefield is far too treacherous.
To complicate the context of this simple answer even further, the acquisition of Minister Ramatlhodi’s shares occurred through interesting and tenuous circumstances to say the least. The minister was recently the subject of divorce proceedings and his ex-wife, Ouma Ramatlhodi, is a 28% shareholder in a company called Legakabje Mining and Exploration. Having been married in community of property, this means that half of what the minister owned went to his wife and half of what she owned went to him at the settlement of the divorce. The issue is that through various levels of shareholder agreements and BEE partnerships, Legakabje owns a stake in Anglo American Platinum (Amplats), one of the employers affected by the lengthy platinum belt strike.
The fact that the minister ended up with an estimated R20 million stake in the company through a divorce settlement could be argued as serendipitous, if not coincidental. Muofhe particularly wanted to point this out and make it clear that the minister had no part to play in the acquisition of these shares. What this inconvenient acquisition of shares points to however, is how the private business affairs of family members should be viewed in light of politics.
Politicians, not the contrarian bloke that persistently interjects at community policing forum meetings, but members of the legislature and the executive at local, provincial and national level have no reason to have business interests. Since the minister himself has an extensive legal curriculum vitae, he should know that not only should justice prevail but that justice should be perceived to prevail. Questions around his motive for mediating negotiations at the start of his ministry have already arisen. Perceptions around his involvement already point to suspicion, many believing that he only intervened due to his selfish concern for Platinum mine shares he owned.
With Ramatlhodi and the rest of his cabinet colleagues earning an annual package of R2.1 million annually and his legislature colleagues earning between R904,000 and R934,000 annually, is there any reason for politicians in office to have third party business interests?
Firstly an annual salary of anything between R904 000 and R2.1 million a year, places you firmly at the top of the middle-class pyramid. Remuneration at these levels not only ensures that you are well rewarded for working for your country and its people, it should eliminate greed, in essence paying you enough to remain straight edged. Apart from that, moonlighting is never seen as a positive thing, not even in the private sector, corporate rat race world.
Many companies allow their employees to have side projects, provided these are declared and do not supersede or come into direct competition with the business of the employer. Hence most of these enterprises end up being small ventures, usually managed by trusted family members or friends. A greater onus should vest with politicians in power, which should quite frankly preclude politicians from holding private business interests completely.
The most obvious and glaring reason is that government is the largest enabler and potential client for most businesses. The minister’s business interest albeit coincidental, is by far the most tasteless. The portfolio he oversees is meant to enforce and regulate the very sector within which he owns shares. Although R20 million-worth of shares in a mining company is by no means a controlling stake, the minister’s involvement in the negotiations, even if well intended, could not be perceived as completely clean, with its sole aim being the return workers to work and their employers adding to GDP.
Beyond that, government controls the levers of power. It is government that determines who gets the tender, who is granted the mining licence and whose query at SARS receives first priority. So, if politicians own the very companies that depend on government for these services, services that come under regular scrutiny for fair practice, how do we, as ordinary citizens, ever believe in clean fair play when the people tasked with enforcing and creating the rules compete against us?
As for family members of politicians in business, they too present a serious challenge. If it is accepted that politicians could use their power to unfairly benefit businesses they own, the same could be said of businesses their family members own. Family members could be used as veils behind which the real ownership of the business is hidden. Secondly, who in the world of business would say no to the spouse, child, sibling or parent of a parliamentarian, cabinet Minister or member of a provincial government? As unfair as it may seem, the truth is we need to be just as tentative about the business activities of family members of politicians as we are of those conducted by politicians themselves.
Ramatlhodi was an office-bearing politician when his then wife acquired a stake in Legakabje, in fact he was Premier of the very province where mining opportunities were being looked into (Limpopo). Should he not have ditched his shares then, rather than wait “more than a decade” later? Business and politics will always have a relationship, a relationship we all view with suspicion, however where clear conflicts of interest can be avoided we should make clear calls. It is not good enough for politicians to tell us what business interests they have, their only business interest should be with running the country while in office. DM