SARA GON
“Those who don’t like this idea – tough for you. That is how we are proceeding.”
The supreme irony is that Ramaphosa’s vast wealth is founded on access to white capital eager for access to government.
The ANC “deployed” Ramaphosa to become a major beneficiary in empowerment deals aimed at creating wealth outside formal ANC structures.
In 1996 Ramaphosa resigned as secretary general of the ANC and became deputy executive chairman of New Africa Investments Limited (“Nail”). Nail, supported by Metropolitan Life, was the first broad-based black economic empowerment (BBB-EE) vehicle.
Nail invested R7 million to start an investment bank, Pleiade Investment Corporation, to raise capital. Publicly, it was a financial adviser and brokered an investment deal between SBC Communications and MTN. SBC invested R25 million in Pleiade (renamed AMB Capital).
In 1996 AMB acted as “adviser” to a R2,7 billion BBB-EE deal in which the National Empowerment Consortium (NEC) took a share in Johnnic Holdings Limited (Johnnic). AMB also raised R2,1 billion so that certain NEC members could acquire a controlling stake in Johnnic.
The members mostly came from Cosatu unions. The capital came from union pension funds. AMB proposed Ramaphosa as chairman of Johnnic.
In 1996, AMB raised a further R1,3 billion for the Ikageng Share scheme, AMB Southern African Investment Fund and AMB Holdings.
By the end of 1997 these deals held a 10 per cent stake in all listed JSE shares. The Afrikaners had taken nearly 20 years to achieve the same level of ownership on the JSE.
Thus Ramaphosa helped favour these companies with government contracts and enhance their BEE status. Ramaphosa sat on nearly 20 boards including Alexander Forbes, SABMiller, MTN and Bidvest.
When Ramaphosa divested from Shanduka to become vice-president, BizNews interviewed Chris Bishop, MD of Forbes Africa. Forbes estimated Ramaphosa’s wealth then at $700 million.
BizNews said that foreign investors weren’t sure about Ramaphosa’s understanding of the capital world because he came from a BEE market.
Bishop replied that Ramaphosa learnt the hard way as a lawyer and union leader (National Union of Mineworkers). BizNews countered that Ramaphosa was given shares.
Bishop said that he had learnt in the boardroom. Hogg argued that business is about creating. Ramaphosa couldn’t go wrong with the McDonald’s franchise or a Coca-Cola Bottler that he didn’t build from scratch. He had acquired ownership, not learnt business the hard way.
Bishop argued that he learnt a lot from the 1987 mining strike.
In 1987, as general secretary, Ramaphosa took the nearly 344 000 National Union of Mineworkers’ members out on strike. Ramaphosa believed that worker agitation could further weaken the state, as mass action had already done, to achieve a “dramatic transformation”.
NUM demanded wage increases of between 40 per cent and 55 per cent, while the Chamber of Mines offered 12,5 per cent.
- Sara Gon is currently a research fellow at the Institute of Race Relations. She is a former acting judge of the Labour Court and an assessor in the Labour Appeal Court. She managed Tararam, the Israel/SA Culture Fund and spent a year working for the Helen Suzman Foundation.
