Should we just let the Gupta businesses choke and die?
Our banks don't seem willing to help the brave business rescue duo of Klopper and Knoop in a quest to rescue companies that rightfully belong to us all.
Pravin Gordhan, the Gupta brothers and Bathabile Dlamini as Easter eggs. Picture: Michel Bega
I was intrigued yesterday by a media statement from Standard Bank distancing itself from a City Press report saying they were willing to offer their services to Gupta companies again.
The paper had reported that the Gupta companies’ business rescue practitioners, Johan Klopper and Kurt Knoop (why do business rescuers always seem to be Afrikaans okes, by the way?), had managed to get Standard Bank to agree to reopening banking facilities for eight embattled Gupta entities.
The bank, however, then denied that it was ever willing to help poor old Klopper and Knoop. They maintained they had terminated “all dealings with the Gupta family and all entities controlled by them” in 2016 and were not about to “unterminate” that decision.
Some employee at Standard Bank must also have had a very bad Tuesday after his employers revealed that “any impression created” that they had been willing to throw a lifeline to any Gupta entity “was created by an employee that was acting out of mandate”.
They planned to “discipline” the employee concerned.
Obviously, it seems, any Gupta PR taint is just too risky nowadays, even if you may be doing the right thing.
The key point – which I’m not sure even Standard Bank is recognising – is that, currently, none of the eight companies, including the Optimum and Koornfontein mines, is being controlled by the Guptas or any of their directors. They’re being managed entirely by these white okes, Klopper and Knoop, who have considerable powers to make sweeping changes to all of these businesses according to Chapter 6 of the Companies Act.
Klopper and Knoop must, by virtue of the law that governs business rescue, be given all company records and be offered complete access to every aspect of these businesses. They will be legally bound to forward to the authorities any evidence they come across of reckless trading, fraud or any other contravention of law relating to the companies.
Basically, Klopper and Knoop could achieve more in a few weeks of coalface investigations than the whole state capture inquiry that was launched this afternoon might do in a year.
Both Klopper and Knoop are officers of the court and are allowed to remove anyone from the current management structure and appoint anyone else in their place – though they’ll sometimes need further permissions from the court.
Existing company directors will also only be allowed to fulfil their functions under the supervision of these business rescuers.
I’m not just casually saying that any or all of these Gupta companies deserve to be rescued. No doubt most of South Africa would like nothing more than to see them come crashing down and obliterated in a blissful destructive orgy of karma making babies with schadenfreude.
But we can’t just turn a blind eye to the fact that as many as 7 000 employees at these companies are everyday people who are just doing their jobs and are worried about how they’re going to feed and clothe their families. With the Bank of Baroda withdrawing from South Africa, tail between its legs after being seriously implicated in Gupta complicity, there will soon be no one left to bank these companies and ensure they stay viable.
Klopper made it clear in a radio interview last week that if banking facilities could not be arranged, it would be “the end of the road” for the companies.
Aside from the obvious humane demand of saving as many jobs as possible, there should also be other considerations.
By now most of us have accepted that many of these Gupta companies exist because of the benefits they reaped from close access to state power. Billions in taxpayer rands were diverted to the Guptas and helped to create these companies over several years. As a taxpayer, it shouldn’t be too hard to build an argument that we, to some extent, may be the rightful owners of these businesses and that whatever decisions are made about them should in the main offer direct benefits to the public at large.
It may be time to put some of those nationalisation theories to the test in one way or the other.
But that won’t be possible if these companies are simply allowed to fall apart due to an avoidable cash flow crisis.
The rehabilitation funds of R1.75 billion for the Optimum and Koornfontein coal mines are also nothing less than public money, and that cash is still sitting (apparently) with the Bank of Baroda.
I strongly doubt that the plan is for these companies to be “rescued” and then simply handed back to the very same actors who have been capturing and looting the state. Surely there are numerous more positive and sensible possible outcomes, and that’s what Klopper and Knoop (don’t they just sound like a great Boere folk band?) should be trying to do.
Curiously, when he was finance minister Pravin Gordhan asked the courts to declare that he had no powers to tell any of our banks who they should and shouldn’t take on as clients – at the time, he truly didn’t want to step in and save the Guptas.
It’s a damn shame then that, now, government may not be able to give a polite prod to our private banks to pull their heads out of their arses and help us to salvage what we can.
I’m not saying it needs to be Standard Bank that comes riding to the rescue. But it wouldn’t be a PR disaster if one of our mighty banks at least did.