The day would start with a prayer meeting. Then the bags of cash would be arranged for delivery to the army of corrupt officials and politicians whose patronage built Bosasa into a multi-billion-rand-a-year enterprise.
This was a typical day at Bosasa, according to Angelo Agrizzi, former chief operating officer at Bosasa turned whistleblower.
“No-one wakes up and decides to create a corrupt organisation,” he told Moneyweb on the sidelines of the CFO Talks anti-corruption debate in Sandton on Wednesday. “There is a grooming process that takes place.”
It starts with small gifts, then larger ones, until you are captured by the corrupt organisation and become part of the conspiracy of silence. “Then I got handed a envelope with R20 000 in cash and was told I should take my family to Mauritius for the weekend. The gifts keep getting bigger.
“Then one day you are asked to drop off a parcel for someone, and God help you if you don’t. You are told ‘if we go down, we’re all going down together’. There is a very clear threat in this, which is how they buy your silence.”
Agrizzi says he has received several death threats, as well as an offer of R60 million to keep his silence.
Capturing the captors
Earlier this year he told the Zondo commission of inquiry into state capture how bags of cash had been delivered to key correctional services personnel, including former correctional services commissioner Linda Mti and the department’s chief financial officer (CFO) Patrick Gillingham.
Agrizzi, Mti, Gillingham, and former Bosasa CFO Andries van Tonder were arrested by the Hawks in February on charges of corruption, money laundering and fraud. Numerous high profile ANC figures have been named by Agrizzi as recipients of bribes from Bosasa (later renamed African Global).
Speaking at the debate, Agrizzi said the system of graft at Bosasa was so endemic that staff turnover (out of 6 800 employees) was just 0.02%. Corruption was the business model, despite the existence of an ethics and governance committee that met once every four months. The 15-strong committee, populated by professors and PhDs, but was powerless against Bosasa’s “narcissistic leader” Gavin Watson, who surrounded himself with people who would do his bidding.
Watson boasted that Bosasa had a “flat organisational structure” but this was a euphemism for no structure at all. The company burned through 12 chartered accountants in two years, some of them because they could no longer stand being errand boys in a corrupt organisation.
Agrizzi bemoaned the lack of whistleblower protection in SA. “Protections for whistleblowers are non-existent. In fact, you get arrested [for blowing the whistle],” he said.
“How do you go about challenging CEOs who have captured the government?”
Under former president Thabo Mbeki, corruption was at “manageable proportions”, said Corruption Watch head David Lewis. “Under [former president Jacob] Zuma it consumed the state. The Arms deal under Mbeki was a serious episode, but it was discreet. The state capture project [under Zuma] involved the capture of the key decision-making structures of the state. State-owned enterprises [SOEs] were targeted because that’s where the money is.
”You had this dream team of Brian Molefe and Anoj Singh who came from Transnet to Eskom. The Zuma-Gupta syndicate was the best of the lot. Zuma had influence over the boards of SOEs and didn’t need to do anything else.”
Not enough to have captured No 1
But Zuma was only useful to the Guptas so long as he was president of the country, which meant the ANC itself had to be captured. This involved infiltrating local, provincial and national structures with bribable agents of corruption.
It’s time to prosecute individuals involved in corruption and send them to jail, said Lewis. The recent arrest of eThekwini mayor Zandile Gumede on charges of fraud, corruption and racketeering relating to a R208 million tender within the Durban Solid Waste unit was a good start.
Corruption is the CFO’s fault, added Agrizzi: “You are the ones who control the purse strings.”
Nicolaas van Wyk, CEO of the SA Institute of Business Accountants (Saiba), said corruption would be slowed if there was a change in the Companies Act, or a dedicated CFO Act spelling out the duties and obligations of the CFO.
Ethics training, legal counsel needed
“CFOs should be obliged to attend an ethics course once a year, and must make a declaration any time [they become] aware of an attempted or successful bribe or corrupt transaction. Furthermore, if the CFO resigns, [they] must state the reasons for resigning. This is similar to the obligation placed on an accounting officer in the Close Corporations Act.”
The question before the delegates was: What role did CFOs play in SA’s corruption scandals and what needs to be done to stop it?
“The King Report [on corporate governance] gives us guidance, and the Institute of Directors trains people on the expected role of board members,” said Sasha Monyamane, professor of governance and ethics at the University of SA (Unisa). “Every organisation proclaiming themselves as having good governance should send their people for training.”
Professional bodies need to provide more than just advice to finance executives reaching out for help in corrupt organisations. They need legal counsel and protection, said Van Wyk.
Dr Kelvin Kemm, suspended chairman of the Nuclear Energy Company of SA (Necsa), says there are far too many political appointees in state-owned companies (SOCs).
“Far too often we see ministers running the departments and SOCs. What’s the point of having a board if the minister has the power to override them?”
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