Hush money meant Bosasa’s 40% margins would never be sustainable

I’ve finally managed to set aside time to begin reading Angelo Agrizzi’s marathon testimony to the State Capture commission. Having consumed only 100 of the 1,600 pages in the first page-turning affidavit, it is already obvious that Gavin Watson’s “business model” was always destined to implode.

In business terms, Watson approved cash bribes of R6m a month to pay those who helped his Bosasa secure massively inflated State contracts. These bribes accounted for between 2.5% and 5% of a contract’s value; ensuring Bosasa generated profit margins of 40%.

The long-term problem for Watson was always going to be the hush money. For instance, a particularly disgusting fellow called Gillingham demanded (and got) R100,000 a month after he’d been “retired”. Another thief, Mansell, escaped to the US where he received a monthly stipend of $7,000 to stay silent.

Such ever growing cash calls were always going to force Watson to play ever bigger until, one day, there wouldn’t be enough State contracts around to fund the greasing. So a collapse was always on the cards. There is nothing more powerful than the truth. And the bigger the story, the more it craves freedom.

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