Stefaans Brmmer Rafic Hariri, the controversial Middle East billionaire behind the equally controversial bid by Cell C for South Africa’s third cellphone network licence, is set to re-ascend the prime ministerial throne in his native Lebanon. Hariri and candidates of his Dignity bloc made a clean sweep of seats in the capital, Beirut, in parliamentary elections last Sunday. A majority of Lebanon’s MPs reportedly back Hariri to be appointed prime minister next month by President Emile Lahoud, who ousted him from the same position in late 1998. Hariri’s likely political comeback could further complicate Cell C’s status as designated recipient of South Africa’s new cell network licence. Hariri’s dual role as head of the Lebanese government and majority owner of Cell C will add a new level of clashing interests to a licensing process already mired in allegations that the South African government interfered to favour Cell C. Greg Mills, director of the South African Institute of International Affairs, commented this week: “For South Africa … it would be potentially problematic should something go awry with the Cell C deal, as it could impact on bilateral relations – and vice versa.” Hariri is one of the richest men in the Middle East, with a family fortune estimated by Forbes Magazine at US$4- billion (about R28-billion). Crown jewel in his commercial empire is Saudi Oger, a Saudi Arabian construction company which, via one or more subsidiaries, owns 60% of the Cell C consortium. The now-defunct South African Telecommunications Regulatory Authority (Satra) two months ago selected Cell C for the licence, but Minister of Posts, Telecommunications and Broadcasting Ivy Matsepe-Casaburri has been prevented by a Pretoria High Court interdict from endorsing that decision. The court, approached by losing bidder NextCom, ordered a judicial review of the selection process.
NextCom claims Cell C was improperly selected after interference in the supposedly independent process by, among others, Matsepe-Casaburri and Mojanku Gumbi, legal advisor to President Thabo Mbeki. Gumbi reportedly helped force the recusal of Nape Maepa, chair of Satra. Maepa’s sidelining, on the apparently spurious allegation that he had a conflict of interest, seems to have tipped the scales in favour of Cell C. While it has emerged that senior South African officials meddled in the selection process, there has so far been no proof of impropriety. Both the African National Congress and the government are saddled with interests tending to coincide with those of Cell C. They are: l Hariri and Saudi Oger are close to the rulers of Saudi Arabia. Saudi Oger is, unofficially, the official royal public works company and Hariri, who made his fortune in Saudi Arabia as a young man, has been commercially and personally close to Saudi King Fahd and other Saudi royals for two decades. To complete a triangle of friendship: the ANC is also close – indebted, some would say – to the Saudi royals. Nelson Mandela disclosed at an election rally last year that the ANC had received $60-million (about R420-million at current exchange rates) from them over a number of years. l The South African government has put huge effort into promoting an R8-billion South African arms-for-Saudi-oil deal, which if it comes off will present a quantum leap for the local arms industry. The deal has been stalled for several years but arms parastatal Denel recently indicated it expects a breakthrough. Denel paid R100- million “marketing expenses” upfront. The South African government will find it hard to do anything to incur the displeasure of the Saudis while the deal is still in the balance. l It has been said the government feels the West has not invested sufficiently in South Africa, and that investors from non-aligned countries should be rewarded. Hariri, businessman-politician, is also no stranger to conflicting interests. When Hariri started his original stint as Lebanese prime minister in 1992, many of his employees landed top jobs in his administration. Fouad Sanioura, his financial director, became minister of state for finances, while his Merrill Lynch portfolio manager got to be central bank governor. The father of Nizzar Dalloul, Hariri’s business partner and son-in-law, landed the defence portfolio. But Hariri’s greatest challenge was to rebuild central Beirut, shattered by 15 years of civil war. In 1994 he created Solidere, now Lebanon’s top company. Hariri’s administration gave the reconstruction job to Solidere, in which Hariri remains a major shareholder. Investors have already recognised the significance of Hariri’s political comeback: Solidere’s stock price rose significantly after the weekend. In the last year of Hariri’s previous administration, 1998, Solidere reportedly made a net profit of $54-million, but this dropped to less than $4-million last year under his successor, Selim Hoss, whose administration delayed approving construction permits. During Hariri’s original reign his country’s cell network licence went to Libancell, co-owned by his business partner-relative Dalloul, and most broadcasters were shut down in a media crackdown, leaving Hariri’s own extensive media interests untouched. Harri’s gargantuan charity projects in Lebanon have won him countless admirers – and charges of vote-buying. His single- minded reconstruction of Beirut has earned him respect, but also international opprobrium for his supposed “confusion” of private and public interest.
Hariri’s office earlier this year claimed he “never conducted business” during his earlier term as prime minister and that his son managed his Saudi business empire. It said he donated all his Solidere profits to charity; that a Finnish government enterprise had won the cellphone tender and that “the Finnish government” had chosen the Lebanese partners including his relative; and that “the operation of the law”, not Hariri, was behind the media clampdown.