The man behind the attack on Land Bank MDHelena Dolny has some axes to grind, writes Mungo Soggot
The man behind the attack on Land Bank managing director Helena Dolny has good reason to dislike her – she blocked his bid to tap Land Bank funds for his private company.
Former Land Bank chair Bonile Jack – who has accused Dolny of racism, nepotism and corruption – served as director general of agriculture in the former government of the Ciskei, one of most despised of the homeland regimes.
Jack has also been investigated by Judge Willem Heath’s special investigating unit for allegedly having acquired state-owned farms at well below their market value while he was in the service of the Ciskei government. The investigation was blocked by 1990 legislation that shielded Jack from the Heath probe.
In addition to being tainted by his links to the Oupa Gqozo regime, Jack has a questionable track record in the agricultural and development field.
Jack cited the Land Bank’s refusal to give a black-owned agricultural company a grant as the prime example of Dolny’s racist dealings – one of the central allegations in his letter to President Thabo Mbeki that was leaked to The Star last week.
Jack is deputy chair of this company, Baasa Holdings, a post he held while serving as chairof the Land Bank.
On the basis of Jack’s four-page letter, the Land Bank has launched an investigation into Dolny, the widow of late South African Communist Party stalwart Joe Slovo.
Jack became chair of the Land Bank in 1997 but former minister of agriculture and land affairs Derek Hanekom did not submit Jack’s name to the Cabinet for reappointment this year. Some sources suggest that Hanekom axed Jack because of a tip-off from the Heath unit.
One source close to the Land Bank says Jack had indicated earlier to colleagues that he would not be making himself available for reappointment. Jack reportedly said that he wanted to become a customer of the bank and that his involvement with the bank could create too many conflicts of interests while he built his new agricultural business.
Jack was shortlisted for the managing directorship of the Land Bank in 1997, but lost out to Dolny.
In 1998, Jack quit the Independent Development Trust (IDT)after a row in which he was accused of setting up and running a private company that competed directly for government and donor funding.
He recruited key staff from the IDT, which channels state funds into development projects, to work on his private venture, EPA Development. Several of these staff members resigned with him.
Jack held on to his position as chair of the Land Bank because the IDT was forced into an out-of-court settlement when he sued for a higher exit package. A senior IDT source said his package was cut because of the fracas surrounding EPA. Jack was never formally disciplined by the IDT.
After leaving the IDT, Jack went on to devote his energies to EPA Development. In 1997, he helped found Baasa Holdings, the agricultural investment company that last year applied for funds from the Land Bank.
In his letter to Mbeki, Jack compares Baasa’s failure to secure Land Bank funds with the successful bid by the Mineworkers Development Agency to obtain a loan. The agency used the loan to join the Land Bank in taking control of Rutec, a Johannesburg- based rural development equipment supplier.
Jack argues in the letter that the comparison is evidence of an inconsistent and racist application of the Land Bank rule that bank directors cannot be awarded Land Bank money. Mineworkers Development Agency representative Kate Philip is a director of the Land Bank. What Jack fails to disclose is that Philip did not stand to gain from the loan: she is the CEOof the Mineworkers Development Agency, a non-profit operation which wanted the loan from the Land Bank to buy into Rutec.
Jack does not even mention the Mineworkers Development Agency in his letter, but only cites the name Rutec, and the fact that “one of the directors in the deal” was a Land Bank director.
Baasa’s case, where its loan application was concerned, was different: Jack is deputy chair of Baasa, a black empowerment company, and therefore, according to Land Bank sources, stood to gain from the loan.
The sources said the rule barring directors from loans was meant to prevent directors from gaining personally, which was why Phillip’s request was given the green light.
Surprisingly, Baasa’s CEO, Andrew Makenete, said of the alleged Land Bank application: “We haven’t applied for any money at the Land Bank,” adding that Baasa had merely inquired what loan options were available.
Jack refused to comment this week on anything related to the Land Bank while the investigation into the allegations was pending. He declined to comment specifically on the Baasa matter and whether he had made himself available for reappointment as Land Bank chair.
The Mail & Guardian suggested to Jack that the fact that Baasa was denied a loan undermined the credibility of his letter to Mbeki. Jack replied: “I don’t want to get into that. You are free to have your opinion as to whether it undermines the credibility or not.”
Guy Rich, a representative from the Heath special investigating unit, confirmed there had been a probe into Jack’s acquisition of three state farms at well below market value while he was the Ciskei’s minister of agriculture.
He said: “The defence raised on behalf of Jack during the judicial inquiry was that the commission was barred from investigating this matter as a deed of settlement was entered into between the then State Trust Board and Jack in terms of the provisions of Section 10 (7) of the State Trust Board Decree No 3 of 1990. The conclusion reached was that the commission was precluded from investigating the matter as it was being dealt with by the State Trust Board at that time.”
The only allegation against Dolny that appears to have any credibility is that she accepted a massive increase in salary from about R600 000 to about R1,1-million. Jack is reported to have said in his report that Dolny improperly steamrollered due process to secure the increase.
However, it appears that the real sequence of events was that the board ratified all salary changes, after which Dolny applied to have hers put into effect. What remains unclear is whether the board decided that the salaries should be discussed with the minister of agriculture and land affairs. One of the allegations against Dolny is that she tried to slip her increase past the new minister, Thoko Didiza.
It appears Dolny did not seek to reduce the increase when she had the opportunity to do so at the board meeting. All the salary increases were made by a subcommittee of the board, chaired by Jack, in consultation with remuneration consultants.
Dolny has received considerable praise for her efforts to transform the Land Bank from an institution that was a bastion of Afrikaner job reservation that generously subsidised white farmers. Unsurprisingly, she has made several enemies in the bank, though most of these are whites who have felt threatened by her transformation policies.
Dolny declined to comment, saying that Didiza has asked all Land Bank staff to refrain from talking to the press about the matter while the investigation is pending.
Although Jack’s letter reportedly gunned for Hanekom as well, it is unclear whether it contributed to Mbeki’s decision to exclude Hanekom from his Cabinet. Hanekom declined to comment.
The M&Gunderstands that Dolny’s lawyers are recommending that she launch a defamation suit against The Star.
A new strain of racial prejudice, PAGE 18