In October 2017, President Cyril Ramaphosa appointed Judge Lex Mpati to probe allegations of impropriety at the Public Investment Corporation (PIC). The Mpati commission found damning governance and ethical failures at the trillion-rand asset manager.
The PIC appears to have turned the corner, with the company recouping some of the billions siphoned by companies such as Steinhoff.
The Mpati commission was established after persistent allegations of corruption at the PIC, allegations that had been ignored by officials for many years.
Ramaphosa must now turn to the Industrial Development Corporation (IDC), which faces allegations of corporate governance failures similar to the PIC case. The concerns are around the IDC’s investment in the R2.1 billion Club Med Tinley Leisure resort deal, a tourism development on KwaZulu-Natal’s north coast.
The Mail & Guardian reports today that although internal processes raised concerns of governance and conflict of interest during the approval processes, the deal went ahead.
The allegations can’t be wished away. They demand a commission of inquiry, headed by a judge. There should be scrutiny at the IDC, particularly in its Agro and Services Industries division, which was involved in the Club Med transaction, in which the state-run company invested R700 million.
Coming after another questionable deal in which the IDC lost R75m in the Kivu boats transaction, where boats were supposed to be built in Kenya and sent to Lake Kivu, Rwanda but were never delivered, the Club Med deal requires attention.
The central question the IDC must answer is why, against the advice of its internal audit, it allowed a senior deal-maker facing charges of financial misconduct in the Kivu boats deal to lead its transaction team for its investment in the Club Med project — only to let him go afterwards for transgressions in the matter.
Although the M&G understands that Ligwa Advisory Services is investigating two officials in the Agro and Services Industries division, the IDC refuses to answer questions, instead offering a generic response. There is huge public interest in the IDC’s investments, particularly the Club Med (Tinley) transaction.
The senior official involved must say what his role was in the transaction.
At what stage was he involved?
Was he involved in the structuring of the consortium?
Did he play a role in the introduction of Tinley Leisure Women’s Investment?
Was he aware that the lead BEE partner was the spouse of the South African Reserve Bank governor?
Was any due diligence done?
Does he not believe that relationship created a perception of conflict of interest?
A commission of inquiry into the goings-on at the IDC will help answer the questions.
The public deserves to know.
The IDC must not become another PIC.
Ramaphosa must now turn to the Industrial Development Corporation (IDC), which faces allegations of corporate governance failures similar to the PIC case. The latest concerns are around the IDC’s investment in the R2.1 billion Club Med Tinley Leisure resort deal, a luxury tourism development on KwaZulu-Natal’s north coast
