How to eat a company — word by journalistic word

Former Transnet chief executive Brian Molefe. (Photo: Oupa Nkosi, M&G)

Former Transnet chief executive Brian Molefe. (Photo: Oupa Nkosi, M&G)

RIGHT OF REPLY

As black people are baboons to Penny Sparrow, black companies are jackals to Sam Sole, Craig McKune and Stefaans Brümmer of the amaBhungane Centre for Investigative Journalism.

On September 16, the Mail & Guardian published a shoddy piece of journalism (“How to eat a parastatal — chunk by R600m chunk”) in which the reporters tried their utmost to rubbish our company, Regiments Capital.

Unlike a balanced story by the same authors published in the City Press, the two-page “exposé” in the M&G contained illogical conjectures and defamatory innuendos. The subtext is that successful black companies only succeed because they are involved in underhanded activities.

The main points of the article were:

• Transnet employed our company without having followed the usual procurement prescripts — an allegation Transnet, in its response, flatly denied. We told the journalists we were appointed by McKinsey, but their minds could not be changed with the facts.

• The journalists claimed our fees were tantamount to “windfall”. The amounts given in the story were grossly inflated. We said we rendered value-added professional services in line with our contractual obligations and earned market-related fees. Transnet confirmed this, but the journalists chose to believe their nameless and faceless sources.

• They claimed that Regiments is close to the ANC because we once confirmed that we donated to the party. We donate to several organisations but that does not make us close. White companies also donate, and no close ANC links are attributed to them.

One example illustrates the fact that this is a hatchet job. On one “interest rate swap” transaction, we are accused of costing the client 3% or more than R100-million, the implication being that this was pilfered by ourselves.

Little attention was given to our explanation that swapping loans from short-term floating rates to long-term fixed rates will result in higher rates (at times 3% to 4% higher) but lower risk, and that these higher rates should not be confused with our fees. We explained in vain that we provide our clients with independent, unbiased advice and execution.

No attempt was made to understand this issue. We were merely painted as thieves. There was a refusal by the journalists to understand the role of intermediaries in transactions of this nature.

Several white-owned consulting and financial services companies routinely bill state-owned enterprises more than R1-billion a year. Why are their fees not characterised as windfalls? Is it irrefutable fact, common knowledge or systemic prejudice that they operate above board and do not warrant media investigation?

We are not above the law. We acknowledge the role of the media in our democratic society. We are not obsessed with race. But this disturbing trend of untrue and slanderous statements being published about black companies is becoming accepted in some media organisations.

It is not right that journalists are used to do a hatchet job by people with secret agendas. This is not the first time amaBhungane has grossly distorted information about our company. The theme is negative, attempting to link us to corruption or nefarious activities.

It is clear that amaBhungane was approached by sources motivated, perhaps commercially, to denigrate our brand. The stories they have already published, despite later corrections of the many factual errors, have caused severe damage to our brand’s reputation.

AmaBhungane published a false story in the M&G that Regiments was corrupt in acting as a transaction adviser and partial funder for the Capitec BEE transaction. They attempted to cast aspersions on how we won the tender for reappointment by the City of Johannesburg for the sinking fund (used to redeem liabilities when they fall due) management. We responded that we were appointed on the basis of past performance, which was the best in the market by a large margin.

Last week’s story was by far the most scurrilous attack on Regiments Capital so far. But no amount of sensational insults will deter us. We have built our reputation over 12 years of struggle in an extremely competitive, prejudice-filled, racist and generally hostile financial industry.

We have overcome high barriers to gatecrash this club, formerly the domain of white big capital. We won’t give up. We plan to build a successful black champion in investment banking.

We don’t say you should not investigate or write stories about our company. We simply implore you to be fair and logical.

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