Paul Nkuna takes honey with his coffee. It’s a quirky detail I cannot help noticing, perhaps because of its almost-ordinariness. Usually, honey goes with tea, right?
But then Paul Nkuna is almost- ordinary himself. Almost. Starting out as a teacher, he ended up as treasurer of the National Union of Mineworkers (NUM), before switching tack to the NUM’s investment company, the Mineworkers’ Investment Company (MIC). Now its chief executive, he presides over a company that was named top unlisted BEE company of the year in 2006 by BusinessMap.
So, not that ordinary then. But he still behaves as though he is, with lingering modesty in spite of his achievements, and a quick, hearty laugh. Of course, his company is not that ordinary either. Despite its success in building an investment portfolio, a very capitalist endeavour, it is wholly owned by an education trust, in a very socialist endeavour.
“Our approach has been informed by circumstances. We have done well, but there are other BEE companies that have done better, for example, Mvela,” Nkuna says. “The secret of our success is that, at the company’s very inception, there was acceptance by the union leadership that the two [the company and the union] were inherently in conflict. So there has been no interference.”
The mining industry had been in decline since 1987, explains Nkuna, with jobs shed in the 1980s never again created. Mineworkers are among the most vulnerable groups in South Africa and many NUM members had no other work experience.
So the NUM decided to form a trust, which would offer bursaries to workers and their dependants and run retraining and reskilling workshops for retrenched workers. This was the start of the Mineworkers’ Investment Trust (MIT), which in turn formed the MIC in July 1995 to raise the funds for this venture.
From R3-million seed capital given by the NUM, the MIC now has R3-billion in assets under management. Since 1999, it has paid R84-million to the trust and, by the end of this year, it will have paid over R100-million.
Nkuna describes the separation between the MIC, the MIT and the NUM as a “Chinese wall”.
“The trust appoints board members and we also make recommendations. Whatever dividends are given to the trust cannot be used by the union, and we have no access to union members. We realised that an investment company would have to operate in a commercial space and that decisions to be taken would need to be commercially sound. That is why there is the separation of leadership.”
Although the company’s board includes directors with a union background, Nkuna says they are there because they understand fiduciary duties and are not necessarily representing the union.
“The intention for BEE was a good one. The implementation may not have been 100%, but the concept was foreign to us, so we were bound to make mistakes. For us as the MIC, we are not opposed to individuals benefiting, but it should primarily benefit broader communities. This is informed by our own background. For us, broad-based empowerment is very important,” he says.
He adds that this means more than the company’s beneficiary base, which in the MIC’s case is more than a million. “How do I ensure the spillover goes beyond the MIC, to develop local economies? [The answer is] truly affirmative procurement, with small businesses assisted to benefit from the asset in their midst. As a BEE investor, we need to be involved in tenders awarded to third parties, in spreading BEE beyond equity and the beneficiary base.”
I ask Nkuna if he has any role models. There’s a pause. “Yes, I do, and maybe it will shock you,” he says. He names advertising guru Muzi Khuzwayo and Yolanda Cuba, recently appointed CEO of the Mvela Group.
“I think you always have to be what you are. I have my own strengths and weaknesses. Do I wish to be Tokyo? I think I’m happy with being Paul. In being Paul, I have made a different contribution. Those two [Khuzwayo and Cuba] … I have seen them rising from the ranks, being creative.”
The MIC is about to conclude two major deals in the delisting of both Peermont Global and Primedia. “It’s not about delisting a company,” Nkuna says of the Peermont transaction. “BEE companies are always lamenting being locked in without realising values. This deal gives us the ability to realise value and plough back. We will also be the majority shareholder. It will be the first black-owned, controlled and managed gambling company. Seventy-five percent of Peermont will be in black hands.
“It’s the next step. I am always irritated by the minimum requirements for BEE. [At 25,1% ownership] you are never a meaningful player, but forever a provider of empowerment status,” he says.
Similarly, with Primedia, the MIC will own, manage and control a major media group. Currently, the company is under joint control with the Kirsch family, but after the delisting, the family’s interest will decline. “We are changing the BEE space in this country and moving away from the minimum requirements,” he says, noting that it’s about time, too.
Nkuna’s career has seen him spend more than a decade in political work, most of it in the service of the NUM. In 1985, the NUM was a founding member of two federations. The first was the Southern African Union of Mineworkers, formed in Harare. “And do you know who was the first secretary? Morgan Tsvangirai!” Nkuna laughs. “And then we came back and the next week we formed Cosatu.”
“You must have worked with interesting people,” I say. “Wasn’t Cyril [Ramaposa] also from the NUM?”
“The most intelligent person I ever came across was Cyril,” he responds. “I learned a lot from him about consultation, about decision-making. There is not much that is more gratifying than being part of a decision-making structure. There was never a situation where he said, ‘We will do it this way’.
“Everything was negotiated and, at the end of that process, we felt we owned that decision. And we could defend that decision, because we had been part of that decision- making. If you are in a leadership position, you have to be part of a team,” Nkuna says.