THIS correspondent may well be accused of banging on about the corrupt arrangement in which the African National Congress has been given a 25 percent stake in Hitachi Power Africa (HPA), the local subsidiary of the giant Japanese multinational, Hitachi Limited.
As is well known but which does not seem to ring alarm bells at Hitachi or the US Department of Justice (DOJ) or the Securities Exchange Commission (SEC) or the New York Stock Exchange (NYSE), the ANC will make billions of rands out of its free stake in Hitachi, held by its investment arm, Chancellor House Holdings.
But there is a lot more to this than money in the back pocket of our ruling party, money which will render it politically invulnerable, enabling it to bury any opposition with its vast and ill-gotten gains from Hitachi which will flow forever from State and private sector business here and in other parts of Africa.
Hitachi is, of course, the beneficiary of a R40bn Eskom contract awarded to it when Vali Moosa was Eskom chairman and simultaneously chairman of ANC finances and its principal fund raiser.
Moosa may have left behind a ruinous shambles at Eskom but he bequeathed his party a huge cash flow in Eskom business, particularly as he should, in the interests of corporate governance principles, have insisted that the ANC divest from any bidder for Eskom business.
As Hitachi pursues its business interests in South Africa surely it cannot be denied that its competitors will be at a serious disadvantage? What chance, they may well ask themselves, do we have in a State or quasi-State contract bidding against Hitachi given the ANC's interests in the outcome?
Prospective competitors of Hitachi may well steer clear of State business, thus robbing the nation of the benefits of competition, and costing taxpayers more billions. Others might invite the ANC to become shareholders, thus deepening a corrupt form of political bribery.
Further, in the private sector Hitachi will have an unfair advantage in that those seeking the sort of services and products it provides - in mining, manufacturing and service industries - might well decide to go with Hitachi in order to curry favour with the ANC.
Last week the great German car maker Daimler was fined $185m (R1,4bn) by the SEC for bribery committed by its Turkish arm doing business in North Korea, Latvia, Bulgaria, Romania, China, Thailand, Greece, Iraq and Russia. Note that these crimes did not take place in the US. But Daimler, like Hitachi, is listed on the NYSE and does business in the US, thus exposing it to the Foreign Corrupt Practices Act (see here).
According to Der Spiegel, an authoritative German publication, Daimler will end up paying out some $500m (R3,7bn) as it has been ordered to cover all the DOJ/SEC legal and other fees involved in the matter. Siemens committed similar offences and paid up $2bn (R15bn) while MAN was another German briber.
Interestingly, HPA falls under the German subsidiary of Hitachi.
The complaint filed by the US against Daimler accused it of having "an inadequate compliance structure" as well as a "corporate culture that tolerated and/or encouraged bribery".
This seems to me to describe precisely the behaviour of Hitachi in South Africa. Clearly there is no chance at all that HPA, or its German bosses, would have gifted the ANC in this manner without approval from Japan.
Two years ago Matthews Phosa, treasurer-general of the ANC, admitted that there were serious corporate governance issues involved in the ANC's stake in HPA and promised that the party would divest itself of the shares.
He has now changed his tune. But what are the DOJ and the SEC in Washington waiting for?
Stephen Mulholland also writes for Finweek. This column first appeared in the Daily Dispatch.
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