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Maree, governance on trial

Sydney Maree, the former 1 500m world record holder, is running the race of his life.

The former champion athlete and one-time head of the state-owned National Empowerment Fund (NEF) appeared in court recently in an effort to clear his name of charges that he stole R1-million from the NEF. What is not in dispute is that the R1-million ended up in Maree’s personal bank account at Merchant Lisbon Bank, a point Maree himself concedes.

Maree’s defence argued that his boss, Alistair Ruiters, instructed him to ringfence the money so that it could later be used as compensation to pull out of an agreement with Deutsche Securities, which gave it first right of refusal on NEF contracts. Ruiters, who was then chairperson of the NEF and the director general of the Department of Trade and Industry, denied this, saying he would never have consented to an irregular transaction of this nature, which would in any event show up in the accounting audit. Ruiters discovered the missing R1-million some months later, and the transaction was reversed.

Whatever the outcome of the case, it raises serious corporate governance issues within the department and the NEF. That a transaction of this size could have slipped under the radar for several months is an embarrassment for the government.

The Specialised Commercial Crimes Court in Pretoria, which is hearing the case, will decide whether this was theft or a financial irregularity. Maree says he transferred the funds to his personal bank account as a kind of set-aside to extricate the NEF from an agreement with Deutsche Securities that gave it first right of refusal on NEF deals. This would violate public sector procurement rules, which stipulate that contracts above a certain size must be put out to competitive tender.

The exact nature of Deutsche’s involvement with the NEF is in dispute. It was argued that Deutsche was engaged at no cost, provided it got first bite at subsequent contracts issued by the NEF. The bank’s South Africa head, Martin Kingston, will later be called as a witness by the prosecution to clarify the relationship. Business Day reported this week that Kingston was rumoured to be on the point of resigning from Deutsche rather than return to the London head office, around the time the Maree case was being brought to court. Kingston reportedly denied the rumour.

The R1-million transfer happened before the NEF ever really got off the ground. It was set up in 1998 to fast-track the black empowerment process and provide funding and support services to help drive this process. Five years later it was all talk and no action, so in 2003 Maree was head-hunted to kick life into the R2-billion government-funded NEF. Barely a year later, Maree was out and the fund was again without a head.

Maree has many supporters who believe he is incapable of the crime with which he is charged.

Born in 1956 in Cullinan, east of Pretoria, Maree sprang to national prominence in 1976 when he became the first and only South African schoolboy to break the four-minute mile at a meet in Port Elizabeth. In 1977 he boarded a plane for Villanova University, near Philadelphia, became a US citizen and went on to establish a string of athletics records. The high point was breaking Steve Ovett’s 1 500m record in 1983 with a time of 3:31,24.

He went on to break the 3:30 barrier and in 1981 became the first black athlete to receive the South African Athlete of the Year award. He returned to South Africa in 1995, working first with the Johannesburg office of Fleming Martin and then setting up up an asset management company in partnership with the Franklin Templeton Group. Before joining the NEF he was head of corporate marketing at the JSE Securities Exchange.

The case continues.

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Ciaran Ryan
Guest Author

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