The world is changing fast and to keep up you need local knowledge with global context.
Punished for paying off Zuma! Bank pulls plug on Bosasa company
EDINBURGH — In the years under former president Jacob Zuma, it looked like corruption was a crime that went unpunished. But, as President Cyril Ramaphosa’s plans to excise graft take hold, the corrupt and the captured are starting to feel the heat from all angles. A bank has pulled the plug on African Global Operations, which has been linked to Zuma’s lady friend Dudu Myeni, former SAA chairperson – reportedly handed wads of cash by the company formerly known as Bosasa – as well as to Zuma. Bosasa’s former chief operating officer Angelo Agrizzi alleged that his boss, Gavin Watson, hand-delivered a bribe to Zuma at his rural home in Nkandla, KwaZulu-Natal Province. “He [Watson] personally delivered it to Jacob Zuma, put the bag [of money] next to him and asked him the question, ‘Does Dudu give you your money every month?’ And his answer was ‘yes’,” Agrizzi reportedly told the Commission of Inquiry into State Capture, Corruption, and Fraud in the Public Sector. – Jackie Cameron
African Global Operations, the services company formerly known as Bosasa, will apply for either a voluntary liquidation or business rescue after a local bank informed the firm it will close its accounts by the end of the month, it said in an emailed statement on Monday. Other domestic and international lenders turned down its applications for a trading facility, citing reputational risks of being associated with the business, African Global said.
As many as 4,500 jobs and 3,100 suppliers are at risk, along with 32 childhood development initiatives in a township called Orange Farm near Johannesburg, it said.
The winding up of African Global comes three months before Ramaphosa’s African National Congress faces elections, bruised by almost nine years of policy missteps and plundering of state assets under his predecessor, Jacob Zuma. Zuma and several serving and former cabinet ministers have been implicated in taking bribes from businessmen in exchange for influencing the awarding of state contracts and protecting them from prosecution, allegations they deny.
It also comes as Africa’s most industrialised economy grapples with 27% unemployment and little fiscal space to rescue cash-strapped and debt-laden state companies decimated by poor management and irregular spending. Ramaphosa has replaced the boards and top management of the government-owned companies at the heart of the looting spree, and several senior Bosasa officials and an official who oversaw the nation’s prisons have been arrested.
Absa Group Ltd. and FNB, a division of FirstRand Ltd., both informed African Global they would close the company’s accounts, Johannesburg-based News24 reported, without saying where it got the information. Absa and FNB declined to comment due to client confidentiality when contacted by Bloomberg News.
“The decisions made by the financial institutions are not based on the African Global Group’s liquidity status, financial stability, operational performance or growth forecasts,” the company said. “On the contrary, the group is both factually and commercially solvent.”
The closures of the bank accounts echoes similar steps banks took against members of the Gupta family and companies under their control after they were accused of using their friendship with Zuma to win deals and pick cabinet members, charges they deny. Companies such as McKinsey & Co., KPMG LLP, SAP SE and Bain & Co. have also been dragged into the scandals.
Ramaphosa last year ordered several investigations into the rot in state institutions, including the Commission of Inquiry into State Capture, a judicial panel probing the influence of private businesses over the government. During nine days on the stand, Angelo Agrizzi, the former chief operating officer of Bosasa, detailed how the company bribed Zuma, the head of Zuma’s charity foundation, members of parliament and other state officials. However, no politician implicated in the probes has yet been bought to book.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.