Private sector gets away with murder
A second major corporate scandal in three years appears to have hit South Africa. This time it involves giant sugar producer and massive land owner Tongaat Hullet.
As it was in the 2017 Steinhoff International scandal, the figures involved are staggering.
In a carefully-worded statement on Friday, the sugar producer said it would probably have to reduce the equity on its 2018 balance sheet by at least R3.5bn after identifying "past practices that are of significant concern".
Simply put, the statement is suggesting that the company's previous management may have misled shareholders and the public by overstating the company's performance. In the process, it is alleged, the then management raked in massive performance bonuses.
As one industry analyst, Chris Logan, put it in an interview with Business Day: "Friday's statement provides official confirmation that Tongaat investors have been misled on a grand scale through taking profits on land sale, which had not occurred, inflated sugar cane valuations, and capitalising costs on cane roots, maintenance and inventory which should have been expensed."
Yet, just like in the Steinhoff case, the story has not received much public attention. Had such alleged dishonesty and apparent corruption happened in a parastatal, it would have been a top story the entire weekend.
This speaks to one of our greatest blind-spots as a nation. While we are vigilant, and correctly so, about what goes on in the public sector, we seem ready to look the other way when scandals hit the private sector.
The attitude seems to be that we view the public sector to be our concern because we pay taxes and believe that private companies are the concern of only those who have invested in them. Yet private sector corruption is as big a threat to our economic health as a nation as graft in parastatals and government is to our democracy.
Only a clean and honest private sector, where greed is not allowed to thrive, can guarantee us sustained economic growth that creates decent jobs for people.
Corporate greed and chasing after huge bonus payouts at all costs by executives have to be fought with the same zeal that South Africa is now fighting state capture.
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