Monday, October 09, 2006

e-Government and South-Africa (7)

I wrote some days ago about the government owning 37 per cent in the state’s telecom company Telkom and thought that selling them would speed up the knowledge society. It looks like more people are thinking of speeding up, but then in a get-rich-quick deal, at least the South-African Sunday Times think so. Yesterday it had a story on the front page with the headline: ANC chief in R50 million get-rich-quick deal. (R50 million is roughly 5 million euro or roughly 8 million US dollars).

Basic facts first. SBC, the American telco sold shares to the Elephant Consortium for R9 billion last year. The consortium, made up by many companies included also companies in which Ngonyama, ANC Head of the Presidency, and a former director general of Telecommunications as well as other former civil servants and businessmen are shareholders.

The allegation. When the deal was done there was an outcry as this consortium was seen as get-rich-quick scheme. Besides it was alleged that some officials prepared the deal and left office in order to buy themselves in. The consortium did not have money to buy the shares directly, but found a civil servants’ pension fund to pay and warehouse the shares, so as to allow the consortium members to raise cash. There was also a lock-up rule proposed till 2010.

This lock-up rule seems to have been broken by the company of Mr Ngonyama. So by selling 5 percent of the shares he had not paid and only a claim on, he has enriched himself for R50 million.

This clearly smells of corruption. High officials and former civil servants with prior knowledge get rich quickly, while the country has all kinds of problems. One thing is certain, dial-in and ADSL in South-Africa will not become cheaper of this deal and the road to the knowledge society will just be longer due to this type of deal.


Blog Posting Number 532

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