Mamphela Ramphele held an extraordinary press briefing on Wednesday at the offices of her lawyers, Webber Wentzel, in a bid to pre-empt any allegations in a forensic investigation being carried out into various trusts and projects set up by the Technology Innovation Agency (TIA).
The chief executive, Simphiwe Duma, has taken special leave for its duration, but Ramphele – who resigned as chairwoman of the TIA when she established her new political movement, Agang SA, earlier this year – indicated she smelt a rat. She was “long enough in the tooth” to see how commissions or forensic investigations could be used to discredit individuals.
She suspected there would be an investigation into an agriculture project, the Terbrugge Trust, in her home village of Bochum, outside Polokwane in Limpopo where the agency, which falls under the Department of Science and Technology, had invested less than R5 million. She noted that the decision to invest in the trust had not been put before the board as it was below the threshold required for a funding matter to be put to it. She pointed out her family had donated the land. She in no way benefited financially from the project.
Defending the honourable work of Duma, who “had built a fantastic team… of largely young black [people] and women who are technology specialists” and had produced two years of clean audits, she said “this wonderful work is now being disrupted by this forensic audit process which in our view is odd… because there could have been a simple conversation between the new board and the outgoing board”.
The agency, which has been given about R500m to boost innovation projects this year, said in a staff memo in July that the new TIA board had received allegations over procedural and governance matters.
Ramphele said she was releasing the information in the interests of transparency. Some would argue she is putting the cart before the horse.
There are probably many spectators who will be watching the roll-out and success or demise of the Royal Mail initial public offering (IPO), which the British government confirmed yesterday and could launch in a matter of weeks.
The problems of corruption and inefficiency that have bedevilled South Africa’s own post office makes the idea of privatisation attractive, if the UK can provide a compelling case study. Demand for shares in the Royal Mail IPO are strong and public interest has continued to surge since mid-August, according to London-based ETX Capital.
ETX Capital should know as its clients have been trading the grey market listing for the Royal Mail, which the financial services firm set up in July. “We experienced the strongest demand from mid-August onward. Prior to that, there were some concerns about the industrial action possibly affecting the IPO which sapped some of the demand,” head of trading Joe Rundle said.
The UK government, while confirming the float on the stock market, has indicated that the launch date would be in the coming weeks. Royal Mail has secured borrowing worth £1.4 billion (R22bn) from a syndicate of banks.
According to Rundle, the indicative price of the offering is due within a couple of days. “We expect it to be priced very attractively by the government in order to garner the demand to deem this IPO a success given the importance surrounding it.”
The Royal Mail operates in Great Britain and Northern Ireland. There were fears that industrial action over pay and work conditions by more than 100 000 postal staff, the first nationwide strike since 2009, could affect the IPO.
Staff have been allocated 10 percent of the company for free. Each employee’s stake is worth about £2 000 (R31 357) at a valuation of £3bn for Royal Mail. The public is able to subscribe for shares from a minimum of £750. page 24
Figures from the JSE yesterday showed massive net sales of listed shares by non-residents on Wednesday – R15.2bn worth. With net bond inflows worth only R25m on the day, total portfolio outflows amounted to just under R15.2bn – in one day.
The numbers would have sent alarm bells ringing, on fears that foreigners were fleeing the country.
However, an indication that the figures were off the mark was the improvement in the rand on Wednesday. The currency strengthened to R9.87 to the dollar from R9.98 on Tuesday.
The JSE admitted to an error and said the data would be rectified today.
However, no one was available to explain the nature of the error. Was it simply a case of finger trouble? Apparently not, because the numbers would have been corrected immediately. Were transactions incorrectly booked? In this case they would have to be reversed.
Even without these errors, the situation looks grim. In the 10 working days to Tuesday, net portfolio outflows totalled just over R4bn. This is problematic because the gap between income from exports of goods and services and the import bill is getting wider – equal to 6.5 percent of gross domestic product in the second quarter from 5.8 percent in the first.
This current account deficit has been plugged by investment from abroad over recent years. But a change in global sentiment about the merits of emerging markets is jeopardising the trend.
The best case scenario is that the JSE’s mistakes started earlier and we will wake to find it was all a terrible dream and Bobby is still alive. However, the JSE may see things differently.
It proved impossible by late yesterday afternoon to obtain details about the errors as the officials who usually field questions did not have an answer, were not answering their telephones, had left for the day, or were not in the country.
Edited by Banele Ginindza. With contributions from Donwald Pressly, Asha Speckman and Ethel Hazelhurst.