LONDON — Sygnia CEO Magda Wierzycka is on a mission to expose the ugly side of South African business and in this hard-hitting discussion she explains why. The qualified actuary who runs the JSE-listed investment group says of Sage Accounting’s firing of the McKinsey whistleblower Bianca Goodson “I have never been more disgusted in my entire life.” Apart from immediately offering the courageous Goodson a job at Sygnia, Wierzycka has been laying into Sage, a London-listed accounting software group, and is once again urging South African business leaders to get onto the right side of history in what she views as the young democracy’s existential battle between Good and Evil. Before the interview she warned me that because her phone is tapped, to expect a short break in transmission during the conversation. The phone tappers duly obliged – listen out for it around halfway through this cracking interview. UPDATE: Ivan Epstein dropped me a mail which reads “In light of recent PR please be aware I am no longer involved in Sage as a Director since Sept 2016. I retired and have been involved in interesting entrepreneurial activities.” As he’s an old friend whom I admire, that’s a relief.- Alec Hogg
Well, it’s a warm welcome to Magda Wierzycka, the CEO of Sygnia who joins us from CT. Magda, you’ve been out there now for quite a few months fighting the good fight against State Capture in SA. How are you managing?
No, I’m well. I think there are things happening, which a large part of it driven by media and a big part of it driven by civil society but I think that we’re on a winning path. I don’t think that you can allow, even if it is 10,000 people, to hold 56 million South Africans hostage so, I’m feeling quite optimistic that this fight against corruption is winnable.
Now you’re an actuary so you’re a scientist, how do you extrapolate that? Is it more than just emotion, the feeling that the good guys are winning?
Look, you can look at some of the political events around the electorate conferences. You can look at what has happened in the Eastern Cape, and what is happening in KwaZulu-Natal and I think there’s more than a sporting chance that the right thing is happening in December. I keep saying that right now all roads in SA lead to December, whether December is December, or whether it’s at the start of it but nonetheless. There are a number of good candidates who could easily get elected and if any one of those comes into power I think we can pull SA from the brink, both economically and politically, within a period of 2 to 3 years, and get back on the right path and have the right conversations. The conversations about education, about job creation, about inequality as opposed to conversations about Gupta Leaks and corruption.
You mention December that’s the ANC elective conference, which really does hold the key, doesn’t it?
That’s right, it does. I think if the right things don’t happen and the wrong people get into power. Then there’s any number of scenarios that can play themselves out. Including the possibility that the ANC will split and obviously, we’re going to live through some rocky times up until the 2019 elections. If we go down that path then it will be a lot harsher economically, and then of course 2019 comes and I think then we’re looking at coalition governments and the situation is a lot less certain but I’m hopeful that the right things will happen in December, and that we get a credible candidate in place.
What got you to take the positions that you’ve had because for a period of time, for a long time actually, you were very isolated. For instance, when you fired KPMG, the business community wasn’t behind you. We got the feeling in the media that you were being left out to hang in the breeze.
I never mind hanging in the breeze as long as I believe I’ve done the right thing. Alec, I still am not convinced that the entire business community is behind me. I think that there are a few companies that have actually, tangibly fired KPMG. I think it’s an inconvenience to fire external auditors, and I think the pressure is really on KPMG, and it isn’t coming so much from the business community. Although, in the last few days a few businesses in SA seem to have found its voice, but it’s coming from civil society and it’s coming from the media. I think KPMG is losing the battle in a court of public opinion, rather than among corporate SA. But that court of public opinion is a very strong one. Hence, if there’s sufficient pressure, and I believe that pressure needs to continue, then I think things will start happening in the business community but I think people are complacent and businesses are complacent. It’s often just so much easier to do nothing, but I don’t think we’re living through times when you can’t afford to do nothing.
I’m not sure how accurate this is, and I’ve asked Adrian Gore to give me his feedback and I haven’t yet received it, but we received an email from someone who was at GIBS last Thursday, where Adrian Gore gave a presentation and said, ‘we need to give KPMG a chance – we need to withhold judgement on them.’ I’m waiting to see if he had been misquoted but if, indeed that is the reality of it, is that the kind of kickback that you’re seeing from members of big business?
Yes, that’s exactly what I’m seeing and I don’t know how much of a chance you need to give people who were very happy to defraud SA taxpayers. Let’s be very clear, even if not all of their dealings with the Gupta Empire was in the public domain. What is in the public domain is the fact that they were very happy to, on one hand, write-off wedding expenses against tax. As far as I’m concerned that’s tax fraud. If we had proper prosecuting authorities in this county they would be investigating this. This is tax fraud, nothing else so, right there you’ve got an issue.
Secondly, they were very happy to besmirch names of honourable people like Pravin Gordhan, like Ivan Pillay, and destroy SARS. How much more evidence do you need, in order to basically decide whether you feel you want to deal with that type of company or not. I don’t need any more evidence. My board of directors didn’t need any more evidence – in my opinion people are too forgiving.
Yes, and moving onto the next one. It’s interesting that KPMG has fessed up, if you like and is taking the heat but McKinsey, from the evidence that we know, is probably even deeper and yet so far they seem to be trying to be brazen it out.
Yes, they are trying to brazen it out. I think that McKinsey is in much deeper trouble. KPMG is in trouble because as I said to them, ‘their trouble is not over.’ There’s still regulatory issues that they have to deal with. There will come a time when they have to testify in front of parliament so, irrespective of what corporate SA does, I think their troubles are not over. McKinsey – there is more than sufficient evidence that they were very happy to pay fronts, in the form of Guptas, in order to secure contracts. I think McKinsey is going to feel the heat from the US Department of Justice, from the FBI so I think their problems have only just begun. Obviously, we’re living through these very interesting times in SA, where we’ve got a non- and dysfunctional prosecuting authority, hence nothing is happening. I think McKinsey, first of all, they took an enormous amount of money but I think that their problems are only just beginning.
I was interested to see your Tweets this morning about the whistle blower from Trillian on McKinsey, Bianca Goodson. They were quite cryptic. What were you meaning?
Well, Bianca, who is a very honourable and brave woman, and she’s obviously one of the Trillian whistleblowers. She was the CEO of Trillian for a number of months before she resigned, once she realised what the company was all about. Subsequently to resigning from Trillian she joined Sage Pay, and she always disclosed to them that she is the Trillian whistleblower and obviously, last week she decided to go public with all the information and her direct line manager assured her that they had her back. But she is a highly honourable person so, she then emailed the CEO for the region and basically, said that, ‘if her disclosures in any way, would damage Sage reputation, she would volunteer to resign.’ It wasn’t a resignation but it was merely an offer. An honourable company would have come back and said, ‘Bianca, we have your back. We need whistleblowers in SA. We support your stance against corruption. You are an incredibly brave person.’ Instead of that he sent her an email back saying, ‘we accept your resignation.’
Wow, is this Ivan Epstein?
That is Pieter Bensch.
Pieter Bensch? His boss has got to be Ivan Epstein, who is a South African, who will be horrified to hear this news. It really is a strange approach…. [UPDATE: I discovered after the interview that Ivan Epstein, the founder of Softline which was acquired by Sage in 2003, retired from the multinational in September 2016. I know well, and was surprised because from my knowledge of the man he would never have countenanced this – which he obviously did not. – AH]
I have never been so disgusted in my entire life. To the extent that when I found out, I obviously reached out to Bianca. I offered her a job and hopefully she’ll accept, but this isn’t a woman with enormous resources. This is a woman who is placing her life at risk. This is a woman who is doing it for SA and for all the right reasons and for a company to treat her this way is just breathtaking.
Pieter Bensch of Sage, why should I consider you anything but supportive of state capture? Please explain. I am open minded. @sagegroupza
— Magda Wierzycka (@Magda_Wierzycka) October 2, 2017
Yes, particularly a company which is in the business of providing integrity to accounting, which is what Sage is all about…
Exactly, it’s always all about accounting somehow so, I have already at Sygnia given instructions to review whether we use them as a supplier on anything and we’re terminating any contract that we might have with them. I want nothing to do with the company that behaves in this manner and this is… When we are living through times when we want to encourage whistleblowing, we need it. We need to have more people coming forward with evidence of corruption but they’re not going to do so, if the consequences of that is that they lose their livelihoods. It is absolutely absurd, and absolutely unacceptable. I have seen Sage is kind of tap dancing around this issue and misinformation that they’re trying to put out there and I know that it’s false and I am just absolutely disgusted and horrified.
Pieter Bensch of Sage, just to let you know Bianca has a job. You can not keep loyal South Africans down! @sagegroupplc
— Magda Wierzycka (@Magda_Wierzycka) October 2, 2017
Given that it’s a global company, also listed on the London Stock Market and in a big fight against a very good competitor from New Zealand called Xero, it will be interesting to see how this all plays out. Why is it important for companies to not only stand behind whistleblowers but actually to stand up and be counted right now?
We are involved in this epic battle in SA right now about all that is good about this country and decent and moral, and all that is driven by greed, corruption, and a great desire to loot this country of all of its resources as quickly as possible. In an environment like that it really is a fight between good and evil, and whistleblowers (people who come forward) and businesses that stand up, are all on the side of trying to get this country back on track. Trying to get the economy back on track. Trying to get conversation back to one where we’re talking about job creation, solving inequality problems, dealing with the issues of poor education. While people who are engaging in the looting of this country have absolutely no desire to engage in those conversations because they are too busy trying to scheme what they’re going to steal next and how they’re going to go about it. So, in an environment like that businesses must stand up because if we don’t stand up then in 2 or 3 years’ time there won’t be an economy to fight over. Then we might as well all pack our bags and say, ‘we’re immigrating.’ I’ve been a refugee once. I have absolutely no intention of being a refugee again so, I will stand up and fight for as long as I can.
Magda Wierzycka is the CEO of Sygnia.