🔒 Editor’s Desk: Shining a light on the Stellenbosch Mafia exposé

The bad behaviour of a group of powerful and wealthy men known as the Stellenbosch Mafia makes for exciting reading. It also highlights how far South African society has come from the bad old days. Historically, South Africa was an opaque and shadowy place, in which the powerful and the wealthy operated with impunity. But the last decade has seen South Africa shrug off its authoritarian legacy and embrace the democratic norms of openness and transparency. A library-full of tell-books like The Stellenbosch Mafia, Tobacco Wars, The President’s Keepers, How to Steal a Country, and Rogue have been published, detailing malfeasance in the halls of political and economic power. More and more, the powerful have nowhere to hide in sunny SA, and that’s a very good thing. In this episode, Alec Hogg and I discuss The Stellenbosch Mafia and the fall of Hogan Lovells, exploring how whistleblowers’ and journalists’ actions have helped us see the light on these shadowy actors. On a lighter note, we also discuss the latest and trendiest diet fad: intermittent fasting. – Felicity Duncan

Hello and welcome to this week’s episode of The Editor’s Desk with me, Felicity Duncan, and with Biznews editor in chief Alec Hogg, right here on Biznews Radio.
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Last week Alec we talked about Biznews’ relationship with one of the big stories of the year, and I would like to pick up on a similar theme today and that’s talking about the role that Biznews has played in uncovering what has come to be known as the Stellenbosch Mafia. And I think we can credit our own Biznews friend David Shapiro with the origination of that name.

The Stellenbosch mafia is, specifically, a group of very powerful and wealthy individuals based in and around Stellenbosch who, over the last four or five years, have been revealed to have been engaged in some very dirty business.

Well, it’s interesting the whole Stellenbosch Mafia name was done in jest by Shapiro on an interview that we had probably 15 years ago, and it was not meant in a negative sense. We were referring to Jannie Mouton, who was building a good business at that stage, GT Ferreira had moved there, one of the co-founders of First Rand, of course, Johann Rupert and the Remgro family are there.

But it has evolved in the popular discourse, Stellenbosch Mafia has become no longer a phrase of endearment almost, to something that sounds really dark and dirty and manipulative etc., thanks to Bell Pottinger, the unlamented, departed UK once-biggest PR agency, who worked for the Guptas and propagated that within South Africa.

What is interesting is that Pieter du Toit, who’s the perfect guy to actually have written a book on this, went in and did lots of investigation and asked the question: “Is this a malevolent group of people? Are they doing bad to South Africa? Are they too powerful and over-controlling?”

The reason I think Pieter is the perfect person to write it is he went to school at Paul Roos, which is the main high school in Stellenbosch. A very good, strong rugby high school, as well – rugby’s an integral part of that whole society. He also went to Stellenbosch University, which for many years has been the nursery of rugby players born in South Africa.

So, he is integrated into the society and he also got interviews with people who otherwise wouldn’t really talk. You know, for me to sit with Johann Rupert for two days to unpack his view on the world would be an almost impossibility. I’m not Afrikaans. I’m not from Stellenbosch. I’m not one of his pals, or perceived pals and that’s just the way it is.

Whereas Pieter du Toit, coming from that world, got to spend two days with Rupert, after he’d done that appalling interview on Power FM, which I think sent most of the country against him and unpacked why he did the interview in the first place and what he thinks about Stellenbosch and what he thinks about the future etc.

So, he was the right guy. Whether Pieter du Toit is going to remain friendly with Stellenbosch, whether it’s going to remain receptive to his views is another thing.

It’s a very good book. It’s almost a tell-all. It exposes a lot of things that the rich and powerful in Stellenbosch would have not wanted him to have written. And that’s what gives the book its appeal. It was the best-selling book in South Africa on its release, the week of its release and it continues in that position. It’s one of those must-read books to understand a very important part of the South African business scene.

You know, I think that it’s a sign – that the success of this book and the number, the vast number of books that have been written about the state capture scandal and all of this – it’s a sign of South Africa becoming a more normal, healthy, transparent democracy.

Because, you know, call it what 30, 40 years ago, South Africa was a place of censorship. It was a place where no one – or not no one – but people were afraid to speak truth to power and it was just an opaque society. There was a lot of shadowy, powerful figures who we didn’t know much about.

And I think that the success of this book really shows how South Africa is evolving more towards a transparent society, where we identify and seek to understand the people in power and what they’re doing.

And you know that kind of sunshine, whether it’s shone on business, whether it’s shone on politics, whether it’s shone on what goes on at the South African Rugby Football Union – all of that is really healthy, and is the way to build a more stable and, ultimately, a more prosperous society. Because one thing that we know, of course, is that markets only work when information is available and flows freely.

You’re so right. There’s a conflict that’s happening in society in South Africa and in the world, between power and force. Power comes from legitimacy, it comes from consciousness. It comes from understanding what is happening around you. It comes from empathy and – dare I say – Ubuntu. Force comes from a position of ego, a position of “do it my way or the highway. I know this. I know what should happen.”

And if you have a look through history, the great tragedies for mankind have been due to people who act from force rather than power.

In South Africa, you’ve got a president, at the moment, who could apply force very easily, in the way that Jacob Zuma was trying to apply it before, but he doesn’t. He’s not made that way. He’s a person who’s applying power, the power of unity, of intellect etc.

Whereas in many other parts of the world right now… Donald Trump is a great example. He uses force. He says “I’m going to smash the Chinese by putting tariffs on their goods etc.”

And it’s a very important ‘state of mind’ battle that’s happening in the world right now. In South Africa, fortunately, right now, at this point, is going much more towards the power kind of application – open society, questioning those who are in positions of great power, should they be accountable or not. And it’s a very, very healthy thing, Felicity, that you’ve put your finger on.

Very healthy indeed, even though, of course, it can be a slow process as we’re learning. And at Biznews, we follow a lot of the long-running developments in things like, for example, the role that Hogan Lovells played in the state capture scandal. And I know we had some news on that recently, with Paul O’Sullivan telling us a little bit about how transparency, ultimately, has caught up with Hogan Lovells and has had consequences for it.

It’s an amazing story, this one. Hogan Lovells is one of the big legal firms in the world, run out of the United States. They’ve got a bigger office in Europe, in London, and a significant office in South Africa, where they merged when a lot of the professional firms came into South Africa. They did deals with local companies and there was a company here called Routledge, which became Routledge Modise, which merged with Hogan Lovells.

And they were intimately involved on the side of the baddies, if you want to call it that. During the Zuma era they were obstructionists in using the legal system to obstruct the progression of very obvious legal cases. I suppose they would argue that everybody deserves their day in court, and even if a person is evil they should have a lawyer. The argument that you would make, if you come again from the power perspective, rather than the force perspective, would be: Hang on a minute. You are liable. If you’re going to be protecting somebody who is patently destructive to the system, then you must pay the consequences. You must take the consequences of that. KPMG are taking the consequences, McKinsey are paying the consequences. And now, Hogan Lovells is the latest of the big multinationals that has been brought to account.

And it’s been an effort between Lord Peter Hain, who grew up in South Africa, and had to leave during the apartheid era because of his own anti-apartheid parents, in fact, having to flee for their lives – and by Paul O’Sullivan, who’s the forensic investigator in South Africa who’s done so much amazing work. And they have targeted Hogan Lovells, and they’ve gone at them. And in this past week, Hogan Lovells announced that it is now only going to have a small office in South Africa – instead of having around 100 lawyers, which is a very big business, they will have around 20, and that the balance of those lawyers are going to be going and starting an independent firm.

Paul O’Sullivan says: That’s not good enough. I’m going to be like a hyena tracking a kudu, and the the new Hogan Lovells, in other words, the independents who’ve gone off on their own, he says I’m not going to let you rest until you apologise and pay back the money.

So, that’s the kind of thing that we, as the public, can now see and there are champions around who are making sure that the those who did profit from state capture, in whatever way it was, will be brought to book.

And that’s what you want to hear, also, because I think that so often with these things – it happened with Bell Pottinger in the UK, you know – that the firm got into trouble for the many, many things they did wrong and then was dissolved. But, of course, all the people who made up the firm, who are ultimately the ones who engaged in the problematic behaviours, just moved on into new roles and formed a new firm and carried on the sort of Bell Pottinger way as it were, just with a different brand name.

And it sounds like we’re seeing something similar happening here. And I think that what Paul is saying is important, is that, you know, ultimately, we have to bring the people involved to account and not just be satisfied with the dissolution of a brand name, when ultimately it’s not that the registered name did anything, it was really the people who were the ones who are out there doing the things that cause the firm’s downfall. So it’s nice to hear.

That is so relevant. Go back to 2008. In the run up to 2008, the Great Financial Crisis, you had bankers who were making fortunes by taking excessive risk. When the excessive risk was shown to be so and the system virtually almost collapsed, the bankers who had made all these bonuses and banked hundreds of millions of dollars, or billions of dollars, were bailed out by taxpayers, who have still got a much higher government debt to service than they had had before.

And those bankers who bought the fancy houses and the fancy cars and lived on the edge – there were no consequence for them.

And this is something that is changing. Millennials don’t accept this. And they shouldn’t. Older people have almost been conditioned into believing that, in particular in a country like South Africa, you know, the doctor is right and he will tell you or she will tell you what you should take and then you just believe it. The politician knows best. The system, the establishment is right.

That’s not always a certainty – in many cases, that’s not true. They don’t know best. Sometimes, they are acting through most tips that are not benign. And as a consequence of this, the world is changing and bringing the people, the individuals, more and more to account. It saddens one, though, that ten years ago, when the great financial crisis occurred, that those who had caused it, most of them walked away with all the ill-gotten gains and society had to pick up the tab. Maybe we’ve learned something from that.

One can only hope. 

Before I let you go, I wanted to pick on something a little lighter, just to let our listeners know that we have seen enormous popularity for an article that we had this week about fasting.

Fasting, intermittent fasting, is the practice of eating normally part of the time and then spending part of the time in a fast. Kind of like what people in religious contexts do, where they don’t take any food and drink only water for a period of time.

And this has become a massively popular fad diet in the United States. It’s everywhere right now, apparently, in the UK. And it’s supposed to have all kinds of benefits. But, as you pointed out earlier today when we were chatting, it seems like just a couple of years ago, Banting was the thing that was wildly popular. Now, we switch to fasting. To me, it seems like this is just a tacit acceptance of the fact that nothing works and we have to keep trying.

Maybe we’ve got something. I do know a lot of people who lost a lot of weight on Banting and I don’t know if they necessarily put it back on again. But sensible eating is something that the world is moving towards. I’ll tell you something that I think about with all of this, and particularly with fasting – we have these incredible bodies. They are unbelievably powerful and you can see that from the placebo effect, for instance, if our mind believes something, our bodies will address it.

And for years we’ve gone on a path where we’ve believed, again, other people know better. So, a doctor gives you a pill, but the pill might not necessarily be what is necessary for your body. But, if you just left it to your own body and allowed your own body, in many cases, to address these things, that usually is the better result. 

And I think, with fasting, what the philosophy is here – certainly in that Wall Street Journal story that we published in premium that has done so well – is that if you give your body time to recover, it is such an amazing mechanism, an organism that it will address many of the things that otherwise might cause you problems.

But if you eat, if you’re just going to keep your digestive system rolling, for instance, eating late at night, early in the morning, drink lots of coffee etc., and you put your digestive system or you put your body under unnecessary strain, then you are going to pay the consequences.

So, it is a fad, but there might be something in this. That is, again, as we go on this journey of discovery as a species, we realise that there’s a whole lot to be done that we don’t know. And as we start learning more about it, even in things like this, it’s an exciting time to be alive isn’t it?

It definitely is, and I sincerely hope – I maybe sounded a bit facetious there – but I hope that we’re able, all of us, to chart a path to a healthier life. Because it certainly is something that’s very difficult.

I read, recently, there was a study released about contestants from The Biggest Loser. They achieved spectacular weight loss and after the end of the show, they all carried on – well, not all of course, but many of them – carried on exercising very hard and sticking to their diets. And yet so many of them gained the weight back. And the “science” part of the study showed that their metabolic rates had collapsed, really, and that something about the process of losing that weight, their bodies rejected it, and wanted to go back to what the body felt was a normal weight. And so the body cut the metabolism to try and get people back to that weight that it felt was the right one, whether or not, of course, it was a healthy weight.

And just reading the struggles of those individuals, it is such a sad and difficult situation, and one really hopes that we can figure this out. Because, you know, I read a great quote that said “Saying that obesity is the result of overeating is like saying alcoholism is the result of over drinking.” This is true, but it’s not very helpful to the people experiencing these things, and our solutions cannot be, well, just drink less, well, just eat less. That’s not helpful. And so, of course, I hope that there’s a path for everyone to find a way to health. Because right now, it seems like we don’t have a very good set of directions coming from medical quarters, when you see people with these struggles.

Yeah. And the way that many of these dread diseases have been expanding – diabetes etc. Maybe it’s all about habits. It’s all about parenting. It’s all about the early ages, you know, how you you start in life is often how you continue. And, I guess, that puts such a premium on parenting, which is again something that we are understanding much better today than we ever did in the past. So, mankind is making progress. Sometimes we don’t see it because it’s slow, but we are moving in the right direction.