Defend Truth


Business leadership SA finally wakes up


Sygnia CEO Magda Wierzycka is no stranger to challenging the status quo. The actuary and consumer advocate believes in forcing transparency in the financial services industry, one educated investor at a time. Her outspokenness has earned her a legion of online trolls and is reported to have SA fund managers shaking in their boots. Shes the only female CEO of a fintech company in Africa and loves all things future tech. She tweets from @Magda_Wierzycka.

After taking out a full-page ad in the Sunday Times calling on ANC members to vote with their conscience, Business Leadership South Africa, representing many large South African corporates, seems to have finally found its voice. It has also demanded a meeting with President Jacob Zuma to discuss the irrevocable breakdown of trust between Business Inc. SA and the government.

Unfortunately, discussions about relationships are a bit like marriage counselling – lots of talking, cajoling and promises. But unless there is a real willingness by both parties to change and meet each other halfway, not much will be achieved. In fact, over 50% of marriages end in a divorce despite the availability of counselling.

In this instance, given the removal of Pravin Gordhan, the essential FICA Bill not being signed, and the new-found narratives about nationalisation, radical economic transformation, White Monopoly Capital and land appropriation, I think it is safe to assume that marriage counselling has failed. In fact, the breakdown cuts deeper. One party has called the other party’s bluff. Moreover, the president of South Africa has called the whole of South Africa’s bluff. Hence, to maintain this relationship on an even keel, one needs to respond in kind.

What can BLSA bring to the table? First and foremost, it must be remembered that the business sector provides employment for 13.5-million or 86% of the country’s working population and pays the bulk of the taxes. That makes it a powerful force if it stands united.

It can use that power to take a number of legal steps without resorting to actions which could be challenged in court. Let’s think of some.

  • Business can withhold capital. I don’t mean not paying taxes. I mean asset managers refusing to invest in any future bonds issued by either the government or state-owned enterprises. In the case of SOEs, all funding should be withheld until proper boards of directors, with no political affiliations but with relevant commercial experience, are appointed to run these in a financially responsible manner. All SOEs should be subject to audits performed on a pro bono basis by the big four audit firms, including audits of finances, tender processes and risk management frameworks. These audits should be made available to the newly constituted boards of directors.
  • Business can call on the international investment community to stop propping up the South African government until corruption has been rooted out and proper governance has been restored. This is as simple as making some phone calls to large international asset managers.
  • The rand and the bond market clearly reflect the fact that international investors are unaware of the political risks facing South Africa. They assume that mass demonstrations are a sign of change, like they are in Brazil. They are not. Unfortunately, we are at the beginning of our journey towards change, not at its end. Business can make international investors aware of that.
  • BLSA companies should allow their staff to protest without deducting the time off from their leave. I am not going to shame some large corporates which asked staff to take leave in previous demonstrations. But a time for shame may come.
  • Private businesses can refuse to tender for government projects. They can also terminate all projects currently managed for the government and the SOEs.
  • BLSA can freeze all hiring until changes are implemented. This should wake up more complacent people, as well as the student body. They have already shown us that they have immense power to mobilise.
  • BLSA can donate large sums of money to civil society organisations, trade unions and to all opposition parties to strengthen their campaigns for change. It can also mobilise the general population to do the same. In the battle of wallets, South Africans will ultimately win.
  • BLSA can spend money on massive advertising campaigns to educate the general population about the true cost of destructive economic narratives and policies.
  • More plain English adverts appealing to the morality of ANC MPs can be taken out, including assurances that anyone punished for speaking their mind and standing up for the electorate will be absorbed by the private sector.
  • BLSA can help fund legal cases currently on the go in various courts to bring those involved in corrupt practices to justice sooner.
  • BLSA can bring its own civil cases against anyone who, through their actions, destroys shareholder value. It would not be difficult to prove what caused credit rating downgrades and how much shareholders and, for that matter, members of retirement funds and investors in unit trusts have suffered in financial damages as a consequence.
  • BLSA can lobby international governments to exert diplomatic pressure on the South African government to induce change.

The list carries on and on. None of the above steps would be illegal. None are threats. They are merely a response to the government’s recent actions and narratives. Once all the options are out in the open, you can start true negotiations and ultimate healing.

However, the truth is that unless South Africa stands united, and this includes all ANC members who believe in a moral, just and free South Africa, we will achieve little but more marriage counselling. And finally, sadly, a divorce down the road. But not before both parties destroy each other, and the country, in the process. DM


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