Publication: Business Day Issued: Date: 2004-06-07 Reporter:

Ngcuka vs Zuma Farce Shows the Importance of Being Neutral



Business Day

Date 2004-06-07

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Let us just for once cut to the chase. Regardless of what the so-called well-informed might be saying, the now-farcical Jacob Zuma vs Bulelani Ngcuka fight is comprehensively not about Zuma's guilt or innocence in the matter of alleged corruption in the arms deal.

This chase is to pinpoint on whose behalf Ngcuka was attempting to dispose of those who posed a threat to certain interest groups within the African National Congress.

The tragedy that has been wrought inside the criminal justice system shows how dangerous it is even for the incumbent president when a select, vocal and articulate crew gets its hands on the most powerful prosecutorial authority in SA.

There is now no doubt Ngcuka abused his power and authority. Thanks to the public protector, we know beyond doubt that he attempted to discredit the deputy president. And we are a gullible people. If the national director of public prosecutions says Gleason is a crook, we all believe him.

Ngcuka did just this in the case of Zuma and even some socalled "informed" observers accept this as gospel.

In fact, it has zero to do with the matter the parliamentary committee must look into.

It has, though, everything to do with why this happened and on behalf of which crew Ngcuka was acting in this case centred on his confidant, politician-businessman Saki Macozoma.

Equally important for the committee must be the action it takes to ensure that the independence and integrity of this vital office is beyond reproach.

There must never again be any possibility that the national prosecuting authority can be used by one business or political faction to gain an advantage over its opponents.

What has been happening inside the national prosecuting authority has been a re-run of old National Party politics. If you don't like someone, get rid of him by prosecuting him or, better still and certainly cheaper, publicise the fact that you are going to prosecute him.

What has all this really been about? The race for the presidency is open. No one should feel constrained from taking part because he or she is fearful that a powerful arm of government will be pressed into someone else's service to discredit them.

Equally, any businessman or woman must be able to pursue any legitimate economic activity freely and without being required constantly to look over their shoulder.

They must not have cause to think that, just because they may penetrate a competitor's space, a great department of state will suddenly descend upon them.

It is President Thabo Mbeki's well-publicised desire to promote a harmonious and nonracial society. For that very reason it is an imperative that the national director of public prosecutions must not harbour illwill against any section of the rainbow community.

I am not among the great majority who fawn over Arthur Chaskalson. However, I sleep well at night knowing that the chief justice is a man who subscribes wholeheartedly to the constitution, will uphold it come what may, and will do so without fear, favour or political bias.

A man with these same character strengths is needed as director of public prosecutions.

We require a technocrat in the job someone who will discharge it without preference and with regard only that he should do his duty.

Among the 3000 or so advocates in this country there has to be surely? someone who fits this profile.

Long-drawn RAG inquiry simply leads to another blind alley

Will we ever get to know what really happened inside the Retail Apparel Group (RAG) and its subsidiary RAP?

From what I am hearing it looks very much as though strenuous efforts are being made to ensure the covers are drawn down on this failed firm so tightly the truth will never emerge.

The inquiry under section 417 of the Companies Act has been in progress now for the better part of two years. The total cost to the state, the creditors and private individuals of the hearings and the backroom legal work must by now be somewhere between R15m-R20m.

The hearing probably has about another two weeks or so to run. It was meant to have resumed last week and another week-long period was scheduled for late July.

The hearings last week were suddenly called off apparently on the orders of Enver Daniels, the chief state law adviser.

Later, justice ministry director-general Vusi Pikoli confirmed that the inquiry had been suspended because, he said, "the parties wanted to talk". He said an offer had been put to the South African Revenue Service and then said that, so far as his ministry is concerned, "settlement will not compromise further action in the event any law has been broken or irregular conduct committed".

Apart from Pikoli, I have been met by a brick wall hastily erected by most sources, including the usually talkative lead liquidator, Enver Motala. Despite this, it is clear that, at the heart of these proposals, is a deal that was first advanced early last year namely that the banks would withdraw their claims to be preferential (secured) creditors.

This sounds a lot better than it is. As I understand matters there is about R300m in the estate. Claims from the banks and McCarthy (in respect of its debentures) total about R360m.

The South African Revenue Service thinks it is due R120m and workers are looking for about R5m. Concurrent creditors are in for R100m. Then there is the cost of the 417 inquiry, say R20m, and liquidators' fees of R40m. This totals R640m. If revenue and employees are paid out in full and the inquiry costs and liquidators fees are met, this leaves about R115m to be distributed among the remaining claims of R460m.

At about 25c in the rand, that is a whole lot better than creditors would ever have received had the banks and McCarthy been able to prove their securities. And that is the whole point of this.

What has come out of the 417 inquiry is evidence of collusive dealings, claims in respect of undue preferences, and reckless trading by the directors (probably forced on them by their lenders but still no excuse). This is certainly what it appears that the interrogation revealed.

It is also what we should have known was coming when we saw First National Bank's three musketeers (Ferdie Swanepoel, South African rugby board chairman Theunie Lategan and Inus de Preez) playing the time warp game. They employed every legal stratagem available to ensure that they did not have to give evidence in public under oath.

The latest gesture by the lending banks that they will abandon their security is probably meaningless and cynical because it looks as though they had not protected this security in the first place.

If a deal is reached along any lines then it probably also means that the inquiry will be terminated. Full stop.

The commissioner will be unable to submit his report and recommendations.

Despite Pikoli's undertaking on further action not being compromised, a veil will have been drawn over the shenanigans. This is what happens too often in this country. We are past masters at shovelling crap under carpets.

Here was an inquiry that dealt with just about every aspect of the things that are wrong with the liquidations industry.

Out of this it might have been possible to begin laying the framework for an essential industry which operates justly and efficiently. Instead, it is about to be canned.

Equity pie rush

I DO not normally signal in advance a subject for the next week's column. However, I am bound to say that I am becoming disturbed by discernible trends inside the economic empowerment movement.

The old SA was characterised by the concentration of economic power in the hands of a select group of institutions and major firms.

Narrowly based economic and financial power never bodes well for sustainable growth and development. It might be great for a small elite but it is generally lousy for the majority.

I am concerned all that is being changed is the colour of the hands on power and control, not the structure.

Nor am I the only person to be worried. I hear voices of concern from many quarters as the headlong stampede gathers momentum to get on board the great empowerment bandwagon.

With acknowledgement to the Business Day.