Few people have had their fingers in more (BEE) transactions than Martin Kingston, a white male banker born in England. The investment adviser is one of the best wheeler-dealers in South Africa.
A small man with strong features and close-cropped hair half-rises from his chair to greet me. “I trust someone has offered you a drink,” Kingston says. He knows someone has. A moment ago, his secretary had asked me whether I’d like tea or coffee. “It’s not too warm, is it?” Kingston asks, referring to the heating. “No,” I say. “It’s just fine. I’m not hot.” He is fussily solicitious, but I get the impression that he is asking more because he has observed other people doing the same, than out of true concern.
Kingston, an investment banker by trade, is one of the most powerful players in BEE. The empowerment terrain is one where the big investment banks, more often than not, control the purse-strings in marriages — whether out of convenience or romance — between the emerging players of the new elite and established companies. Because empowerment partners often lack ready cash, most deals are financed by debt. And the banks who act as advisers and financiers rake in huge sums. In the BEE landscape, Kingston knows when to call and how to deal. He’s successfully built bridges between established business and the new elite. In short, he’s Mr BEE.
Media-shy Kingston has granted one of the rare interviews of his 23-year career. But despite his attempts to keep a low profile, fantastical stories swirl around him like a many-coloured cloak. An apocryphal tale relates that Kingston — a networker extraordinare — was able to find out the travel plans of Cabinet ministers and business personalities. He would be sure to book the neighbouring first-class seat for an uninterrupted chat en route to the world’s financial capitals. The tale concludes with the snippet that Trevor Manuel, tired of these “coincidences”, banned the dissimulation of his travel information. Kingston, of course, denies this.
Investment banking is a cut-throat business with a take-no-prisoners attitude. And Kingston, with his gift for putting desirable black players in touch with white business, is at the height of his game.
As the chief country officer for Deutsche Bank in South Africa, Kingston was involved in a number of large empowerment deals, including Lafarge’s R1-billion deal and Kumba’s R6-billion transaction. In other business, Deutsche also advised Transnet on the sale of its stake in the V&A Waterfront, and MTN on its Investcom LLC purchase.
Kingston tells me he was a board member of the financial services charter council, and was also involved with the codes of good practice for BEE.
He is also well-connected politically. His first wife, Tembi Tambo, was the daughter of Oliver and Adelaide Tambo, and his second wife, Pulane Kingston, is the daughter of Health Minister Manto Tshabalala-Msimang and ANC treasurer general Mendi Msimang. It’s said that Tito Mboweni was the best man at his wedding.
Pulane herself is a formidable businesswoman who holds several directorships and counts Thuthukile Skweyiya, a former ambassador to France and the wife of Social Welfare Minister Zola Skweyiya, among her colleagues. Kingston-watchers say he’s used his contacts to get ahead, and that he cultivates friendships in high places — names like Manuel, Alec Erwin and Mboweni are mentioned — but that these friendships usually don’t stay the distance.
“I have over 23 years’ experience as an investment banker and have advised clients across a number of continents. I provide advice to decision-makers in the public and private sector on financial and corporate issues. Clearly, my business demands that I build strong and solid relationships with key people across the economy,” Kingston responds when I ask him about perceptions that he has used his political connections to get ahead. “I have not used such contacts as I may have in the public sector to garner deals. However, I hope that my experience of advising clients in both the private and the public sector provides useful insight in assisting them on initiatives they may be considering.”
So which empowerment deal is the veteran adviser most proud of?
“It is difficult to select one. In terms of complexity and addressing all the principles of empowerment as comprehensively as possible, probably the Kumba restructuring, resulting in the creation of Exxaro and the imminent listing of Kumba Iron Ore; the Old Mutual transaction, which saw all members of the Old Mutual Group, including Nedbank and Mutual & Federal, embracing an holistic and integrated approach to empowerment. And finally, of course, Deutsche Bank’s transaction with Uthajiri and its black staff,” Kingston says.
Deutsche Bank’s transaction was indeed groundbreaking, as the foreign-owned investment banks had negotiated an exemption from the financial services charter. Deutsche, however, showed that there was still room for local subsidiaries of multinational groups to engage in empowerment.
But the 2005 Old Mutual transaction, worth more than R7-billion, garnered immense controversy. It was a complex deal that involved several empowerment partners. One of those companies was Sphere Holdings, of which Kingston’s wife, Pulane, is a director.
Kingston refutes any suggestion of impropriety. “Sphere Holdings participated in the transaction as part of the Wiphold consortium at the invitation of Wiphold, which has a long-standing relationship with Old Mutual through earlier empowerment transactions. There was full disclosure to the Old Mutual plc and Nedbank boards as well as Deutsche Bank from the outset. Furthermore, it was fully disclosed in documentation sent to shareholders. No party was prejudiced.”
He confirmed that this was the only instance where his wife had benefited from a transaction he had been involved in. Pulane Kingston declined to respond to the Mail & Guardian‘s questions on the subject.
But analysts say that Deutsche did not look kindly on the inclusion of Pulane on the list of beneficiaries. Kingston’s resignation a year later added fuel to the fire, although both parties denied any connection to the Old Mutual deal. Kingston said he left because he preferred to remain in South Africa, while Deutsche wanted to transfer him to the London office.
“There was no linkage whatsoever to the Old Mutual empowerment deal which was concluded some 18 months before I left Deutsche Bank. As I have indicated previously, I had completed the mandate given to me with respect to South Africa and I had been asked to return to the United Kingdom. I felt there was an ongoing contribution I could make in South Africa,” he tells me.
Kingston’s job titles often appear grandiose, but can lack clear indications of authority and responsibility. What, exactly, does a chief country officer do? Is it really equivalent to a chief executive officer for a local subsidiary? He’s quick to point out that many banks have country officers.
The arrest of Sydney Maree didn’t help Deutsche’s reputation either. The former chief executive of the state-owned National Empowerment Fund (NEF) is charged with fraud, forgery and theft. In September, Maree told the court that Deutsche Bank’s contract with the NEF was awarded without a competitive tender process being followed. The bank apparently agreed to provide advisory services at no cost, on condition it was first in the queue for potential contracts. It’s not clear how Kingston was involved, but he is a state witness.
Either way, Kingston has emerged the winner. He started the advisory firm Longcross Capital, which reportedly is doing brisk business, and will be joining Rothschild in January, as its executive deputy chairman. If there was blue blood among banks, Rothschild would be indigo, with a 200-year history and a history of advising on projects such as the Suez Canal. “Its profile in South Africa is not as high as it might be, and there is more that they can do,” Kingston said, describing the job offer as an “absolutely perfect opportunity”. He added that the job would be a return to his roots as a financial adviser and mergers and acquisitions specialist.