The private sector's big ethics problem unravels after State Capture report

the latest tech news, global tech news daily, tech news today, startups, usa tech, asia tech, china tech, eu tech, global tech, in-depth electronics reviews, 24h tech news, 24h tech news, top mobile apps, tech news daily, gaming hardware, big tech news, useful technology tips, expert interviews, reporting on the business of technology, venture capital funding, programing language

Big business has not emerged from the Zondo Commission report with a glowing track record, as it has been ensnared again in sophisticated corruption that has turned SA into a failed and lawless state.

Arguably, the Zondo Commission report underscores that it took a complicit private sector to make State Capture possible and facilitate transactions in which billions of rands were siphoned off from state coffers to benefit a coterie of politically connected individuals.

the latest tech news, global tech news daily, tech news today, startups, usa tech, asia tech, china tech, eu tech, global tech, in-depth electronics reviews, 24h tech news, 24h tech news, top mobile apps, tech news daily, gaming hardware, big tech news, useful technology tips, expert interviews, reporting on the business of technology, venture capital funding, programing language

The modus operandi of State Capture enablers in the private sector was clear: big businesses actively weakened and repurposed state institutions of accountability or turned a blind eye to questionable transactions and wilfully facilitated them.

The first report from the Zondo Commission has implicated big private sector firms in State Capture and pernicious transactions, mainly US-based consultancy group Bain & Company, auditing and advisory firm PwC, and commercial bank Nedbank.

Global Tech News Daily

The Zondo Commission findings are a turning point for the private sector. They bust the abiding myths that the private sector is more ethical than the public sector and is less susceptible to corrupt practices given the many anticorruption regulations.

The commission’s findings had given the private sector an opportunity to reflect on its worrying ethics and find ways to restore its reputation and integrity, said Bonang Mohale, the president of Business Unity SA (Busa), a business lobby group.

Global Tech News Daily

“It is painful to read the Zondo Commission report. Some of the companies that are members of our organisation have been mentioned in the report, tainting big business with the same brush. There is a big ethical problem in the private sector and the evidence is quite clear,” Mohale told DM168.

Busa is facing growing calls to act against some of its member companies that are mentioned in the Zondo Commission report for all the wrong reasons.

PwC is one such company, as it is a member of Busa and features prominently in the Zondo Commission report for its sloppy auditing work at state-owned airline SAA (more on this later). Busa’s affiliate organisation, Business Leadership South Africa, is also facing pressure from the public to sanction its member companies, including PwC, Bain and Nedbank.

Mohale said the Busa board would urgently engage with any businesses mentioned in the report to get a full briefing about the allegations they faced, and to understand what actions those businesses intended taking to correct their past behaviour.

Busa has committed to support law enforcement agencies, including raising funds to provide private prosecutors, in order to ensure that all those implicated in State Capture are brought to book. Mohale said implicated private sector firms shouldn’t be spared from prosecutions. “This cannot be a commission of inquiry report like others that have been ignored. It must show a heightened sense of urgency, with a bias for action and possible prosecution. People must be in orange overalls. This is how we can purge bad members from our organisation.”

The Zondo Commission findings against Bain, PwC and Nedbank are concerning.

Bain’s shoddy work at SARS

Two commissions of inquiry (the Nugent Commission into the governance affairs of the South African Revenue Service [SARS] and now Zondo) have placed Bain at the centre of capturing, restructuring and destroying the once world-renowned tax collection agency. In doing so, Bain colluded with former SARS commissioner Tom Moyane and former president Jacob Zuma.

The Zondo Commission was scathing about Bain’s conduct after it won a tender in 2014 to restructure the operations of SARS, which did more harm than good: while the organisation struggled to collect tax revenue from the public, about 200 senior managers were displaced and key business units of SARS were destroyed.

“The SARS evidence is a clear example of how the private sector colluded with the executive, including president Zuma, to capture an institution that was highly regarded internationally and render it ineffective,” the Zondo Commission report concluded.

Bain has doubled down, denying that it facilitated corruption. The firm said: “While we made mistakes in our work with SARS, we remain confident that we did not in any way wilfully or knowingly support State Capture at SARS or elsewhere.”

PwC, Nkonki miss red flags at SAA

PwC was trashed by the Zondo Commission for failing to detect any of the fraud and corruption at SAA when it presided over the financial books of the airline for five years until 2016. During this period, SAA faced a serious governance crisis and was already relying on taxpayer-funded bailouts for its survival.

PwC, working alongside fellow auditing firm Nkonki, issued clean audits at SAA and declared that the airline’s irregular expenditure was under control and that SAA was compliant with laws relating to its procurement processes. But this was far from true.

For example, the Zondo Commission found that aviation company Swissport had been providing ground-handling services to SAA without a contract for three years while PwC was overseeing the airline’s financial books. But PwC never detected this. Even SAA’s appointment of PwC and Nkonki as joint auditors was found to have been irregular.

Although the findings against PwC are not new because they have been widely reported, they are a reminder of how the credibility of the auditing industry has been tainted in the wake of many accounting and auditing scandals at Steinhoff, Tongaat Hulett, African Bank and VBS Mutual Bank. PwC has admitted mea culpa for its work at SAA, reiterating that it is disappointed that the audits it performed with Nkonki did not meet the high standards it sets itself.

In bed with Gupta-linked firm

In the Zondo Commission report, Nedbank is highlighted for its “disturbing” involvement in transactions at the Airports Company South Africa (Acsa), a state-owned airports operator.

The report questions Nedbank’s role regarding an interest-rate swap deal worth R3.5-billion involving Acsa, which wanted to restructure its debt and repayment terms of such debt.

Regiments Capital was involved in the transaction. Regiments is a company linked to the Gupta family, which has been placed at the centre of the State Capture project.

The Zondo Commission found that Regiments inflated its fees as a transaction adviser on Acsa’s interest-rate swap deal, as it wanted to extract an additional R50-million in fees.

The report found no evidence that Nedbank engineered or knew about the fee structure that was payable to Regiments by Acsa. However, the Zondo Commission has called for further investigations into the bank’s dealings with Acsa.

Nedbank has denied any wrongdoing.

The commission’s findings have given the private sector an opportunity to reflect on its worrying ethics and find ways to restore its reputation and integrity. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.

The private sector’s big ethics problem unravels after State Capture report
© Provided by Daily Maverick

News Related

OTHER NEWS

New York Rangers get another comeback win to force Game 7 vs. Pittsburgh Penguins

PITTSBURGH — How many times can the New York Rangers dig themselves into a hole and climb back out? At least one more, as of Friday night. The Blueshirts came ... Read more »

Wilson, balanced Aces cruise to 96-73 victory over Dream

COLLEGE PARK, Ga. (AP) — A’ja Wilson scored 15 points, Kelsey Plum had 14 points and 11 assists and the Las Vegas Aces rolled to a 96-73 victory over the ... Read more »

EXPLAINER: Why frustration lingers in Okinawa 50 years later

The Associated PressFILE – U.S. Marine Corps Sgt. Mike Anglen of Turner, Ore., center, stands atop a cliff as Sgt. Bryan Wallace of Pikin, Ill., waits for his turn before ... Read more »

Astros beat Nationals 6-1 for 11th straight victory

WASHINGTON (AP) — Jose Altuve homered on the first pitch of the game, Yordan Alvarez and Yuli Gurriel also went deep and the Houston Astros extended their winning streak to ... Read more »

Kreider scores late, Rangers edge Pens 5-3 to force Game 7

PITTSBURGH (AP) — Chris Kreider’s long slap shot bounced over Louis Domingue and into the net with 1:28 left and the New York Rangers beat the Pittsburgh Penguins 5-3 on ... Read more »

Astros push winning streak to 11, roll past Nationals 6-1

WASHINGTON (AP) — Jose Altuve homered on the first pitch of the game, and Yordan Alvarez and Yuli Gurriel also went deep to help the Houston Astros extend their winning ... Read more »

Moustakas, Drury power Reds to 8-2 victory over Pirates

PITTSBURGH (AP) — Mike Moustakas homered twice and Brandon Drury drove in four runs to break out of a slump and lead the resurgent Cincinnati Reds to an 8-2 victory ... Read more »

Peterson's bases-loaded walk lifts Brewers over Marlins 2-1

MIAMI (AP) — Jace Peterson walked against Anthony Bender with the bases loaded in the ninth inning and the Milwaukee Brewers beat the Miami Marlins 2-1 Friday night. After starters ... Read more »

Padres: No cancer found during manager Bob Melvin's prostate surgery

SAN DIEGO (AP) — The San Diego Padres say no cancer was found when manager Bob Melvin had prostate surgery on Wednesday. Melvin, 60, was recovering at home Friday after ... Read more »

Ogunbowale, Gray help Wings rally past Mystics, 94-86

WASHINGTON (AP) — Arike Ogunbowale scored 27 points, Allisha Gray had 21 and the Dallas Wings overcame a 15-point second-quarter deficit to beat the Washington Mystics 94-86 on Friday night. ... Read more »

Resigning North Dakota senator led lawmakers in travel costs

The Associated PressFILE – North Dakota Sen. Ray Holmberg listens during a joint House and Senate Appropriations Committee meeting at the Capitol in Bismarck, N.D., on Jan. 7, 2009. Holmberg, ... Read more »

Residents in picturesque California county hit with gas prices topping $7 a gallon

A California county known for its spectacular mountains and proximity to Yosemite National Park has been paying the nation’s highest gas prices. Read more »

Boudreau to return as coach of Canucks next season

VANCOUVER, British Columbia (AP) — Bruce Boudreau will return as coach of the Vancouver Canucks next season after helping to turn the struggling NHL club around as a midyear replacement. ... Read more »

New Zealand leader Jacinda Ardern tests positive for COVID

On Location: May 13, 2022 Catch up on the developing stories making headlines.The Associated Press WELLINGTON, New Zealand — New Zealand Prime Minister Jacinda Ardern has tested positive for COVID-19 ... Read more »

Today in History for May 14th

Highlights of this day in history: Colonists go ashore in Virginia to set up Jamestown; Lewis and Clark begin to explore Louisiana Territory; Israel founded; Skylab launched; Movie producer George ... Read more »

Twitter CEO expects Elon Musk acquisition to close, addresses spending cuts

Musk is awaiting details supporting calculations that spam, fake accounts represent less than 5% of Twitter's users Read more »

Padres: No cancer found during Bob Melvin's prostate surgery

SAN DIEGO (AP) — The San Diego Padres say no cancer was found when manager Bob Melvin had prostate surgery on Wednesday. Melvin, 60, was recovering at home Friday after ... Read more »

Renovated NYC museum shows indigenous perspectives

The American Museum of Natural History in New York City recently finished a major renovation of its exhibition on the native peoples of the northwest coast of North America. Curators ... Read more »

Police release 911 calls in Gilgo Beach case

A woman who disappeared in a beach community on New York’s Long Island more than a decade ago, sparking an investigation into a possible serial killer, said “there’s somebody after ... Read more »

Academy Awards set 2023 Oscars for March 12

The Associated PressFILE – Oscar statue on the red carpet at the Oscars on Sunday, March 27, 2022, at the Dolby Theatre in Los Angeles. Next year’s Academy Awards will ... Read more »

Actor Fred Ward, of 'Tremors,' 'The Right Stuff' fame, dies

The Associated PressFILE – Fred Ward, a cast member in “30 Minutes or Less,” poses at the premiere of the film in Los Angeles on Aug. 8, 2011. Ward, a ... Read more »

Judge refuses to drop elections suit against Trump, media

NEW YORK — A Colorado judge on Friday denied motions to dismiss a defamation lawsuit filed by an election systems worker against former President Donald Trump’s campaign, two of its ... Read more »

Q&A: Becky G unveils every side of herself in latest album

The Associated PressFILE – Becky G appears at the Oscars in Los Angeles on March 27, 2022. Beck G’s latest album is “Esquemas.” (AP Photo/Jae C. Hong, File) NEW YORK ... Read more »

North Korea reports 21 new deaths as it battles COVID-19 outbreak

SEOUL, South Korea — North Korea reports 21 new deaths as it battles COVID-19 outbreak. Read more »

North Korea confirms 21 new deaths as it battles COVID-19

SEOUL, South Korea — North Korea says 21 people died and 174,440 people were newly found with fever symptoms on Friday alone as the country scrambles to slow the spread ... Read more »

White Sox place Giolito on COVID list, activate Vaughn

The Chicago White Sox placed ace Lucas Giolito on the COVID-19 injured list and activated outfielder Andrew Vaughn following a rehab assignment with Triple-A Charlotte on Friday. Giolito began experiencing ... Read more »

Traded back and forth, Ford learns to live out of suitcase

NEW YORK (AP) — Mike Ford has learned to travel light — and quickly. Since the start of the season, the 29-year-old first baseman has played for Tacoma, San Francisco ... Read more »

Falcon 9 rocket launches Starlink satellites

A SpaceX Falcon 9 rocket launched 53 Starlink satellites to low-Earth orbit from California on Friday. (May 13) Read more »

Celtics' Robert Williams remains out for Game 6 vs. Bucks

MILWAUKEE (AP) — Boston forward/center Robert Williams missed his third straight game with an injured left knee as the Celtics tried to keep their season alive Friday night in Game ... Read more »

Padres sign Robinson Canó, plan to use him off the bench

ATLANTA (AP) — The San Diego Padres have signed veteran second baseman Robinson Canó to a major league contract and plan to use him as a left-handed bat off the ... Read more »

WNBA star's Russia detention extended by 1 month

The lawyer for WNBA star Brittney Griner says her pre-trial detention in Russia has been extended by one month. Alexander Boykov told The Associated Press the relatively short extension indicated ... Read more »

Louisiana justices toss COVID-related charges against pastor

Hundreds of thousands of Americans fighting long-haul symptoms from COVID-19 Dr. David Putrino from Mount Sinai Health System and COVID long-hauler Joel Fram discuss the long-term effects of the disease.The ... Read more »

Sandy Hook lawsuits against Alex Jones on track to resume

The Associated PressFILE – This Tuesday, Dec. 11, 2018, photo shows radio show host and conspiracy theorist Alex Jones at Capitol Hill in Washington. The Sandy Hook families’ lawsuits against ... Read more »

Rockies' Bryant closer to return after cortisone shot

DENVER (AP) — Colorado Rockies outfielder Kris Bryant took swings in the cage Friday for the first time since he was sidelined with a sore back nearly three weeks ago ... Read more »

Mariners demote Jarred Kelenic to minors after poor start

NEW YORK (AP) — Rather than make his Citi Field debut against the team that traded him, Jarred Kelenic was demoted to Triple-A Tacoma by the Seattle Mariners on Friday ... Read more »

Biden: ASEAN partnership 'critical' in this moment

Looking to strengthen ties, President Joe Biden welcomes leaders from the Association of Southeast Asian Nations to Washington for the first time. “We’re launching a new era in U.S.-ASEAN relations,” ... Read more »

Phil Mickelson will not defend his title at next week's PGA Championship

Phil Mickelson caught lightning in a bottle last year at Kiawah Island, winning a major championship at 50 years of age. The fairways flooded, and the golf world stood and ... Read more »

Tennessee Titans' Malik Willis on Ryan Tannehill's mentorship comments: 'Everything is cool'

The Tennessee Titans didn’t take issue with Ryan Tannehill’s comments about mentoring third-round rookie Malik Willis. Willis and coach Mike Vrabel were asked about Tannehill’s scrutinized remarks following the first ... Read more »

Lawyers plan suit against Lufthansa over Jewish passengers

Lawyers for 26 passengers said Friday they told Lufthansa that they will sue the German airline for refusing to let members of a large group of Orthodox Jewish passengers board ... Read more »

Wild face offseason after yet another early ouster

While the Minnesota Wild were stacking up franchise records and securing the extra home game for the first round, general manager Bill Guerin carefully acknowledged a “great year” for the ... Read more »