18 Wednesday, February 28 2018 BUSINESS REPORT

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AND Bank chief executive TP Ncho- cho doesn’t mince his words when it comes to ramping up the slow trans- THE formation pace in the agriculture sector. And he is prepared to put SHAKE-UP Lmoney where his mouth is. We catch up with Nchocho at the bank’s headquarters at Centurion in , following President ’s Sechaba ka’Nkosi recent State of the Nation address and the subsequent national Budget for 2018 tabled RESIDENT Cyril Ramaphosa this by former finance minister . week drove the final nail into the In the Business Report interview, Ncho- already crumbling Gupta empire. cho makes references to the Ramaphosa Ramaphosa sacked , and Gigaba speeches, and said he appreci- , , ated the sense of optimism in them as they PDes van Rooyen and , among addressed issues pertaining to growing the others, from his cabinet. Few eyes will shed economy, creating employment, transform- a drop over their departure. For while they Faith Muthambi, former minister of Public ation and improving the governance of made for some entertaining education on Service and Administration. PHOTO: GCIS state-owned enterprises to curb wasteful how not to run a government, they also expenditure and corruption. cost billions of rand in capital Ramaphosa said agriculture presented outflows and investments. one of the greatest opportunities to sig- Brown allegedly opened the nificantly grow the economy and create vault to Atul, Ajay and Rajesh Gupta to much-needed jobs. plunder as they pleased. She appointed He’s also acknowledged the crucial role Gupta acolytes such as Brian Molefe, Anoj the sector played in helping the economy Singh and Matshela Koko, while swearing clamber out of a technical recession last by whatever was most sacred to her that all year. was right with the utility. Even when she Ramaphosa said they would accelerate was found to have misled Parliament, she the land redistribution programme, not simply shifted the blame. only to redress “a grave historical injustice, Muthambi, a rural girl from an obscure but also to bring more producers into the village called Vhembe, thought it very pro- agricultural sector and to make more land fessional to let the brothers in on some available for cultivation”. classified cabinet decisions. She also com- Nchocho speaks frankly about challen- peted with Brown in getting what to her ges confronting the country and said that were the best minds to run key government he welcomed South Africa’s prospects as institutions (Think ). the government anticipated an economic Zwane single-handedly elevated the growth of 1.5 percent in 2018, 1.8 percent Guptas from an ordinary immigrant family Former Public Enterprises minister Lynne in 2019 and 2.1 percent in 2020; and the seeking greener pastures in South Africa Brown. PHOTO: FILE projected Gross Domestic Product growth into a sleek machinery that ran the coun- from 0.7 percent to 1 percent. try’s coal mining industry like no other However, Nchocho’s main focus is on company had done. the developmental agenda he’s pursuing The morbid Van Rooyen lied so noncha- at the Land Bank in order to transform lantly that he even attracted the attention the agriculture sector and help grow the of Public Protector Busi Mkhwebane away continental superpower’s economy. from the SA Reserve Bank. As for Mahlobo, He said the development bank had he should take comfort in the probability over the past two years handled more that his hilarious intelligence reports will than R1.2 billion in empowerment equity one day make for a must-read in early finance; its loan book grew from R33bn in childhood development centres. 2015 to R45bn currently, and it achieved a When Mkhwebane’s predecessor Thuli net growth of about R4bn per annum. Madonsela drafted her State of Capture “That’s a lot for an organisation our report, some cabinet ministers were fin- size,” he said. gered as chief lieutenants of the state Nchocho explained that the develop- capture project, making it possible for the mental portion of their loan book was Land Bank chief executive TP Nchocho during an interview with Business Report at the bank’s headquarters in Centurion. PHOTO: SUPPLIED Guptas to plunge the economy into a crisis, 6 percent in 2016, but was now around while fattening their bank accounts. They 13 percent. mental initiatives and that 50 percent of agricultural sector, transformation, sector “It’s not sustainable for the status quo moonlighted as Gupta consultants on key He said: “Our target in the next two to funding would go towards helping black growth, employment quality, food security to remain. Continuing on the status quo state transactions and ensured that state- three years is to have 30 percent of our entrepreneurs. “That’s how bullish we are and sustainable development. can only cause major socio-political risks owned entities (SOEs) were turned into entire portfolio made up of transformation in driving transformation,” said Nchocho. He admits that transformation is a for the country. cash cows for the family. and/or developmental issues in terms of He said the Land Bank was currently thorny issue. “Land reform has to be tackled with Their fall, therefore, signals an end Axed minister of Mineral Resources, loans and investments.” in talks with the Department of Agricul- “One of the challenges we have strug- vigour and with aggression. Those who to one of the most painful chapters of Mosebenzi Zwane. PHOTO: REUTERS He said the bank managed to raise ture, Forestry and Fisheries to implement gled with as an organisation is that the want the status quo to remain must ask South African history, where an elected R7.7bn in new financing last year from a blended financing facility, “whereby you key stakeholders in the form of organised themselves: do they want to participate in government chose to enter into a joint gov- that they will look for wage increases that development finance agencies, including take a grant and combine it with a loan for agriculture are formed along racial lines a constructive land reform or do they want erning expedition that shuttled between will take care of additional costs on their the World Bank, KfW Development Bank, maximum impact”. – AgriSA for whites and Afasa for blacks. to face social civil unrest. It’s happened in Mahlamba Ndlopfu and the Gupta’s Sax- stretched pockets. Nene will have to con- the European Investment Bank, Standard “Essentially, what this means is that you These are two constituencies with very other parts of the world. So, it’s real.” onwold compound. vince them that the belt-tightening exercise Chartered, and through local bonds. blend grant money with debt money. If you different expectations,” he said. Land Bank’s focus areas for 2018 include cuts across all sectors and that the bloated “The ability to raise money is indicative do that, can you imagine the impact that But Nchocho is uncompromising in his increasing its corporate social investment cabinet is firmly under his and Rama- of the healthy state of the Land Bank,” says you can achieve, because you are basically stance of driving much-needed transform- expenditures to R2.1m; partnering with Survivor phosa’s microscope. He will also have to Nchocho proudly, adding that for the past using different types of money to achieve ation in the sector. other development finance institutions and The only survivor in Ramaphosa’s Mon- rein-in the ruffians that currently run the eight years they had achieved clean audits more impact and finance more blacks and “Our view is as follows: Our country intermediaries to co-fund programmes, day night axe is Home Affairs Minis- SA Revenue Service and kickstart an all from the Auditor-General. “We remain on a beneficiaries.” has a particular racial history, where it’s and enhance funding and expand its reach ter Malusi Gigaba, who returned to his but moribund economy. clean path when it comes to governance.” Nchocho talks passionately about the undisputed that black people were unfairly in communities, among others. portfolio just five days after delivering Then there is poor old , For 2018/2019 more than R2.5bn would bank’s Vision2020, the bank’s blueprint discriminated against from owning land. his maiden Budget speech. Most people who will have to polish his negotiation be set aside for transformative develop- aimed at driving in the back-breaking So, we must start there. @luyolomkentane expected him to take the fall for his actions skills to deal with the monumental bungles in his previous portfolio as the minister that Zwane has left behind in the mining of public enterprises and also at home industry. affairs. It was he who approved the Gupta Under Zwane’s stewardship, the bodies brothers’ naturalisation into South Africa. of three workers remain trapped in an But as we turn our backs on their prom- underground container in Lily Mine. Last inence in our body politic, we must spare year the industry recorded 82 fatalities a serious thought for those who are now between January and November. This was Corporate scandals: Buck stops at boardroom table tasked with cleaning up the mess they left the highest number of deaths in the sector behind. in 10 years. New Public Enterprises Minister Pravin Mantashe will also have to rebuild However, it is important that companies pening. Ensure that management has the Gordhan probably has the toughest job of bridges between an industry that had resist the temptation, and avoid entrench- right anti-corruption programme. all the returnees into cabinet. Gordhan decided to boycott engagements with ing this culture, and put severe sanctions Board committees, such as the social has to make sense of how once successful Zwane, because of his carefree attitude in place for corrupt behaviour. Monitor the right things. In and ethics committee, the audit and risk enterprises such as Eskom ended up being over the disastrous third version of the One global example: Siemens paid committee and the remuneration commit- a strain on the fiscus. He has to make sure Mining Charter. When the controversial approximately $1.6 billion (R18.49bn) in monitoring management, tee, have a big role to play here. that Eskom is out of the reach of scorpions charter was released, mining stocks shed fines to US and European authorities Monitor the right things. In monitoring such as the Guptas. more than R50 billion in value on the JSE. in 2008 as a result of having paid bribes the board should ensure management, the board should ensure that He has to ensure that steps taken by He will have to craft a careful balance amounting to $1.4bn, and some senior mem- there is a code of conduct in place, and that Ramaphosa to stabilise its leadership are between the sustainability of the industry bers were criminally prosecuted. that there is a code of anti-corruption training and appropriate followed by the appointment of competent and the dignity of those who work for it. Parmi Natesan and A paper by the Institute of Directors internal controls are in place. and credible people, who will be able to He will also have to allay fears that in South Africa’s Corporate Governance conduct… and internal It is also important to ensure that ser- resist any interference with their executive Optimum Mine will not turn into another Prieur du Plessis Network defines corruption as “giving any- vice providers are vetted and sign contracts responsibilities and stabilise the parastat- Aurora Empowerment System, where the thing of value to entice someone to fulfil controls are in place. explicitly outlawing corrupt activities, and als’ financial systems. politically-connected Khulubuse Zuma, that person’s duties in a particular manner, that due diligence is performed for new He will do well to confer with former Zondwa Mandela and Thulani Ngubane T IS NOW well-established that directors or to accept or solicit anything of value to business ventures and foreign jurisdic- board chairperson Popo Molefe on how to condemned workers into abject poverty bear the ultimate responsibility for any fulfil duties in a particular manner”. tions. tackle this monster called the Passenger after making millions at their expense. corruption that occurs within their or- It includes the whole gamut of facilita- ing mechanisms are in place to prevent Establish a whistle-blowing facility. Rail Agency of South Africa. will have to muster enough ganisations. We have already seen some tion payments, tips and gifts that are used corruption is a board responsibility, and Employees are the most likely source of He will also have to develop much more guts to look into Russian President Vladi- examples of directors falling on their to influence events and encourage a certain critical for governance. Principle 3 intelligence about corruption. interest in Transnet and Denel than Lynne mir Putin’s what former US vice-president Iswords when corruption becomes appar- outcome. around corporate citizenship explicitly Enforce zero tolerance for corruption. Brown ever did in her tenure as a minister. Joe Biden called “soulless eyes” and tell ent, and we can expect demands for this The legal framework is provided by mentions corruption. To support and deepen the ethical culture More than anything else, he will have to him that despite what Mahlobo may have level of accountability to intensify. the Prevention and Combating of Corrupt In addition, fraud and corruption should referred to in the first point, boards must restrain his own colleagues from interfer- promised, South Africa simply does not The need for South African boards to Activities Act (12 of 2004), but South Afri- be considered within the context of risk ensure the corporate culture and code of ing with the running of the SOEs. have any money for nuclear energy. up their game as regards corruption is can companies may also be impacted by governance. conduct are seen to work. Parastatals are high on the National This is what Ramaphosa’s new era will evident, not least in the fact that we have foreign legislation, such as the US’s For- While boards do have a daunting Development Plan as the drivers of state- have to do to convince South Africans – slid from 86 out of 183 countries in the eign Corrupt Practices Act and the UK’s responsibility to stamp out corruption, driven expansive economic growth model who have been numbed by the previous World Governance Indicator for 1996 to 114 Bribery Act. Plan of action they also have the above tested methodol- and job creation. administration – that the country is indeed out of 209 countries in 2013. Directors must take care to ensure that So what are the practical steps directors ogies to help them. Returning Finance Minister Nhlanhla on a new path. At the outset, it is worth recognising they understand if and how these other should take to ensure they have a robust Nene will have his job cut out for him. Ramaphosa may have started on a high, how difficult it is for businesses to operate pieces of legislation affect them, as they anti-corruption culture in place? The Cor- Parmi Natesan and Dr Prieur du Plessis are Besides trying to stave off further down- but his legacy will be judged on how deep in a corrupt environment in which bribery are very wide-ranging. porate Governance Network paper advises executive director: Centre for Corporate grades, Nene will have to deal with a civil he manages to bury the Gupta ghosts and is often the only way to obtain contracts – King IV Report’s emphasis on ethical some key actions: Set the tone at the top. Governance and chairperson of the Institute of service that is already irked by last week’s how far he manages to turn the country especially when economic conditions are leadership, the establishment of an ethical Directors and executives must lead by Directors (IoDSA) respectively. Inquiries: info@ 1 percentage point increase in VAT. from a laughing stock into a respected bad and the pressure to “make the num- culture and being a responsible corporate example, and only an entrenched ethical iodsa.co.za. Better Directors. Better Boards. Public sector unions have made it clear investment destination. bers” is intense. citizen also makes it quite clear that ensur- culture can prevent corruption from hap- Better Business.