Good business basics: Private sector also plays a role in corruption

Very few will dispute the fact that we are as a country, engulfed in a tsunami of corruption, that is touching every facet of our lives.

The narrative around this scourge though, tends to focus on the government sector feeding a perception that corruption is a state/party led issue and everyone else is an innocent bystander.

The reality is, private companies have never needed an excuse, or partner to engage in corrupt practises that bolster their bottom lines and returns to their shareholders.

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Players in the food, cement and pharmaceutical industries actively colluded with each other to keep prices artificially high, by for example, divvying up market share between themselves, or manipulating tender processes to inflate bid awards, as major construction companies did during the 2010 World Cup stadium builds.

Of course, in the recent past, the private sector has found willing partners amongst the thieves and scoundrels who masquerade as our public servants, enabling them to ramp up their activities many-fold, the recent PPE procurement process, for example, scoring them upwards of R14bn, in cahoots with a gallery of thieves in local, provincial and national government departments.

Most alarming, the professions of law and accountancy, for long regarded as bastions of the highest moral standing, have had their ivory towers demolished.

A recent report by the Office of the State Attorney revealed how law firms contracted to the State had engaged in massive and systematic over-invoicing and other fraud amounting to hundreds of millions of Rands.

Little more need be said about the once mighty accounting firms of KPMG and their ilk, who fell prey to the temptations offered by the state capture architects at Transnet, Eskom and other state owned entities.

The fact that some of them have made huge ‘refund settlements’ (strictly without any admission of liability of course), does not in any way allude to some form of consequence management.

Writing in the Business Times this week, Stephen van Coller, group CEO of IT firm EOH bemoans the lax attitude of the private sector in this regard, “You have to put your money where your mouth is and prosecute perpetrators. You can’t let them get away with it’ he notes, adding ‘you can’t give them a golden handshake and let them ride into the distance.”

The upshot is, no matter the source of corruption, it is the consumer that ultimately suffers, either through higher prices, or non-delivery of essential services one is entitled to as a citizen.

The culpability of the private sector in bringing us to where we are as a country must be brought to the fore.

The handwringing and complaints of lack of progress in arresting state corruption will mean nothing unless the private sector can be seen to be putting its own house in order.

Vijay Naidoo writes in his personal capacity as CEO of the Port Shepstone Business Forum.
The views expressed are the author’s own and do not necessarily reflect those of this publication.

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