/ 15 May 2009

Zuma’s Cabinet Inc.

Twenty-seven members (42%) of President Jacob Zuma’s new executive — including himself — are registered on the database of the companies and intellectual property registration office (Cipro) as having private business interests.

But a number of them, notably business mogul and now Minister of Human Settlements Tokyo Sexwale, have already undertaken to resign from all directorships while serving in government.

After Zuma’s appointment of his Cabinet and deputy ministers last Sunday the Mail & Guardian inspected Cipro’s database and found that 27 ministers and deputies are registered as active directors or members of 184 companies and close corporations.

Tokyo Sexwale
The appointment of Sexwale has invigorated the debate about conflicts of interest between ministers’ business and official duties.

Ministers’ document (PDF)

Read full document on ministers’ business interests

He was ranked South Africa’s 20th richest individual worth at least R1,3-billion in the Sunday Times’s 2008 Rich List, although his net worth has decreased significantly since the financial crisis bit.

Sexwale stepped down as executive chair of the Mvelaphanda Group on Tuesday this week.’I cannot work in the private sector. I am fully focused on my responsibilities as minister … I will be departing as chairman of Mvelaphanda and will not be on any boards,” Sexwale said.

His spokesperson, Chris Vick, confirmed on Thursday that Sexwale was committed to stepping down from the boards of all 43 entities of which he is a listed director.

This included non-Mvelaphanda interests such as Fernwood property development and the family companies of former president Nelson Mandela, Magnifique and Harmonieux Investment and Holdings.

‘Mr Sexwale’s position in relation to his equity investments will be clarified in a comprehensive statement by the end of the week,” said Vick. It has been speculated that his shares will be transferred to a blind trust over which he has no control. The question remains whether Sexwale will continue to benefit from the trust’s investments, which could include Mvelaphanda’s shareholding in construction giant Group Five. Group Five has extensive contracts with government departments, including Sexwale’s new housing portfolio.

Enoch Godongwana
Deputy Public Enterprises Minister Enoch Godongwana is listed as a director of 24 companies, including the state-owned defence industrial group Denel, Real People Assurance Company, Chintsa River Development and the Pan African insurance group. Godongwana, a former Eastern Cape finance minister, told the M&G he was resigning from all directorships. ‘In a month’s time you won’t find my name on any board,” he said. A few of his companies are dormant and one company is unknown to him.

Joe Phaahla
Twenty-one companies listed on Cipro have the new Deputy Rural Development and Land Reform Minister Joe Phaahla listed as director. They are mainly mining companies belonging to the Siyaya mining group. Others include insurance firm Glenrand MIB, a Northern Cape mining entity called Namaqua Wollastonite, Vutomi Pharmaceutical Distributors and African Pride Capital.

Phaahla, previously director general for the 2010 Fifa World Cup, did not respond to the M&G‘s questions about his businesses and potential conflicts of interest.

Hlengiwe Mkhize
New Deputy Correctional Services Minister Hlengiwe Mkhize is a director of 15 private
companies, most prominently the Centurion-based defence company, Aerosud, which has benefited substantially from arms deal offsets.

Mkhize said she has resigned from the boards of Aerosud Aviation and Aerosud Holdings, but will remain a shareholder in the company ‘and accordingly declare my interests”. Her other interests include Gosa Technologies, Origami Consulting and Sishayela Phezulu Investment Holdings.

Mkhize, a former truth commissioner, said three of the registered entities were shelf companies and the rest ‘were owned by BEE participants who invited me to cooperate and no formal agreements materialised”.

Sicelo Shiceka
Minister of Cooperative Governance and Traditional Affairs Sicelo Shiceka is listed as a director of 11 entities, but is unsure of their status.

His interests include a number of shelf companies and Kara Agri-Business Consultants, the Fourways Gardens Laundry and Uzusakhe Fishing and Oil.

‘No conflict of interest has been identified as I am not an executive director in the companies, neither am I involved in their operations if any are operational. I understand they are largely dormant,” Shiceka said.

He said he has started establishing the entities’ status and will resign if conflicts of interest are identified. ‘I was never actively or operationally involved with these companies.”

Shiceka said he will resign from dormant companies and stay as a ‘passive partner” in firms that do not conflict with his official duties.

Pecan trees, security and construction
Deputy Social Development Minister Bathabile Dlamini has undertaken to resign from the nine entities she has interests in ‘to give full attention to her current post”.

Zou Kota, who is Sexwale’s deputy, said the eight companies she is linked to ‘don’t bring in a cent” and ‘have nothing to do with human settlement”.

She has, however, resigned from the board of empowerment giant Sekunjalo Investments because of time constraints.

Deputy Minister of International Relations and Cooperation Ebrahim Ebrahim said he is a ‘silent partner” in four of the seven companies listed under his name and that the construction industry, in which they operate, poses no conflict.

Communications Minister Siphiwe Nyanda is on Cipro’s records as director of seven companies.

But Nyanda said he has resigned from four, including arms firm Ngwane Defence; one was de-registered; and GNS Risk Advisory Services posed no conflict.

Nyanda’s position as Public Investment Corporation director could cause a conflict. The PIC has a 13% stake in Telkom, which will be influenced by his department’s policy decisions in the telecommunications sector.

Minister of Agriculture, Forestry and Fisheries Tina Joemat-Pettersson owns a 50% stake in Fire Ring Trading 7, which trades in financial and healthcare shares, while her deputy, Pieter Mulder, has financial interests in two pecan nut farms.

Mulder said it was ‘very unlikely” that his business interests would lead to a conflict of interest.

Minister of Energy Dipuo Peters is de-registering her company, Lelate Consulting and Investments, while Public Service and Administration Minister Richard Baloyi has interests in three entities, but has decided to withdraw from them. ‘[I] aim to walk the talk.”

Presidency spokesperson Thabo Masebe refused to be drawn on the nature and activity of Zuma’s only registered entity, National Pride Trading 259, and Dakawa Properties, of which Deputy President Kgalema Motlanthe is a director.

‘They are not involved in any other business than serving the people of the country. Their every minute and every hour is spent on government business,” he said.