Airports Company of SA minorities sue for fair value buyout

Written by Ciaran Ryan. Posted in Journalism

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Minorities say they are economic hostages to the company

This article first appeared in Moneyweb.

It seems like a lifetime ago, but there was a time when the government seemed serious about privatising and listing the Airports Company of SA (ACSA), which manages SA’s nine airports. Private investors were encouraged to acquire shares at a pre-listing price, and many did, among them African Harvest Strategic Investments and empowerment shareholders who paid with debt.

Among the early investors was Aeroporti di Roma (ADR), which acquired 20% for about R890 million in 1998, or R8.19 a share. This valued ACSA at about R4 billion at the time. With no prospect of an IPO on the horizon, in 2005 ADR sold its shares to the Public Investment Corporation for R16.75 a share, more than doubling its initial investment.

But when minorities asked to be bought out, they were offered R12.87 a share – roughly 40% of ACSA’s net asset value (NAV), despite a 2014 valuation by Deloitte of R18 to R22 a share. In the same year ACSA did its own valuation exercise which valued the shares at just R10.36, less than half the R25.37 NAV a share disclosed in its own financial statements for 2014.

Presidential housing project mired in fraud and corruption

Written by Ciaran Ryan. Posted in Journalism

Hundreds of residents of Gauteng townships cheated out of housing

This article first appeared in Groundup.

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A 2010 presidential project intended to house shackdwellers in the south of Johannesburg is mired in corruption and wholesale land theft, with hundreds of residents cheated out of houses they paid for.

Those who have attempted to get to the bottom of the theft have been threatened and, in one case, kidnapped.

GroundUp spoke to dozens of residents of Thulamntwana, near Orange Farm, who say they paid up to R25,000 to secure housing units in the township, only to find that the units had been sold to other buyers. They have been trying for four years to get their houses or to get their money back, without success.

The town of Harrismith gets a reprieve for now

Written by Ciaran Ryan. Posted in Journalism

This story first appeared in Noseweek.

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SA National Roads Agency’s (Sanral) determination to push through proposals to build the controversial De Beers Pass Route, which will shave just 14kms of the existing route at a cost of close to R10bn, was slapped down by the Department of Environmental Affairs in June this year. The route preferred by Sanral would by-pass the Free State town of Harrismith and put thousands of people out of work as dozens of businesses currently dependent on traffic passing between Gauteng and Kwazulu-Natal would close down.

Those who have been following Sanral’s apparent obsession with building the De Beers Pass Route (DBPR) have long suspected a deeper agenda. The concession to operate the current route between Cedara, near Durban, and Heidelberg in Gauteng, expires in 13 years. No business generating R400bn over the 30 year life of the project is going to just turn off the lights in 2029 and hand back the road to Sanral, as required in terms of the original concession contract signed in 1999.

State-owned enterprises drag SA to the brink of junk

Written by Ciaran Ryan. Posted in Journalism

This story first appeared in Finweek.

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SA’s persistently weak growth and the stench of failure in its state-owned enterprises (SOEs) has dragged the country to the brink of junk status.

Last week Moody’s issued a credit note warning that a credit downgrade was on the cards unless government embraced reforms needed to put the country back on the growth path, and placed five SOEs on downgrade watch. Moody’s warning merely restates facts already on the ground: bond investors are increasingly steering clear of SOEs such as SA National Roads Agency (Sanral), Eskom and Transnet. In other words, a downgrade is already priced into SOE credit instruments.

The medieval state of SA’s home repossessions industry

Written by Ciaran Ryan. Posted in Journalism

This story first appeared in Moneyweb.

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A recent study of home repossessions puts SA among the worst in the world. The enthusiasm with which SA banks rush to repossess homes is described as ‘medieval’ and cruel.

SA might claim to have one of the most liberal constitutions in the world, with supposedly strong legal protections against arbitrary deprivation of property, but tell that to the more than 5 000 people booted from their homes each year by the banks, and the 15 000 served with sale in execution notices, which is a prelude to sale at auction by the sheriffs.

Did Standard Bank lie and cheat to get its hands on computer programme?

Written by Ciaran Ryan. Posted in Journalism

This story first appeared in Noseweek

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Did Standard Bank lie and cheat to steal an idea worth billions? When atm and internet fraud started seeping into public consciousness in the 1990s, Joburg-based software development company Advertising Digital Services (ADS) came up with a novel solution to a growing problem: hackers had found a way to secretly install a program on computers that would record keystrokes and mouse-clicks when users were logging on to sensitive websites. With this information, they could empty a bank account from anywhere in the world. ADS’s solution was to remove the keyboard as a point of entry to the computer and replace it with an on-screen virtual pin-pad that, each time it was used to input a password or PIN number, would rearrange the digits on its virtual keyboard. ADS director Johan Reynders wanted to patent the system, but was advised against it because, in any event, the system was protected by copyright for 50 years.

To avoid any ambiguity about ownership, however, he uploaded it to the internet in the 1990s so that people around the world could download it free, but only with his permission and provided they acknowledged that the intellectual property rights remained with ADS. Importantly, he says, he chose not to provide any information on the uses and applications of the product so as to prevent software developers coming up with rip-offs. He knew the industry had not yet woken up to the threats from hackers. When it did, he planned to introduce his solution to potential clients.

Residents fight back against banks’ eviction tactics

Written by Ciaran Ryan. Posted in Journalism

This article first appeared in Groundup.

A group called Lungelo Lethu Human Rights Foundation is preparing a class action suit against the four major banks for what it says are the unlawful evictions of thousands of South Africans from their homes.

MeetingOnEvictionsMethodistChurch-CiaranRyan-20151202 (1)The group is being led by King Sibiya, who has waged this fight before. “What we are seeing now is no different from the human rights violations that we fought against during the apartheid years. The difference now is we are fighting the banks. And it is not just black people who are victims of the banks, white people are too. This case shows that justice is for the haves, not for the have-nots.”

The Constitution provides protection against arbitrary deprivation of property, but Sibiya says this is routinely flouted by the banks.

How SA slept through the BEE revolution

Written by Ciaran Ryan. Posted in Journalism

This article first appeared in Moneyweb.

When the term Black Economic Empowerment (BEE) first floated into the South African business and political lexicon in the early 1990s, there was some hopeful discussion that it would last just 20 years and then be phased out.

Well, 20 years have come and gone, and if anything, BEE has morphed into something more oppressive and outrageous than even the original architects could have imagined.

In the foreward to Anthea Jeffery’s book BEE: Helping or Hurting?BEE Helping or Hurting, author Rian Malan writes that most journalists missed the most important story of the post-apartheid era. “By the time I reached the halfway mark I was trembling with outrage and bombarding friends with distressed SMSes and emails. Are you aware, I said, that the ANC government has drawn up a ‘final policy proposal’ allowing it to expropriate 50 per cent of farmland without compensation being paid to the farmers concerned? And that the Constitutional Court has already given its indirect blessing to such a move?”

South Africans of every colour need to face up to some harsh realities: white South Africans need to admit that they unfairly benefited from apartheid race laws that kept blacks out of the race; black South Africans need to recognise that the laws being drafted by this government in their name have the capacity to destroy our society “just as surely as the Xhosa nation was destroyed by the Great Cattle Killing of 1856 to 1857.”

Is there a better tax system than the monstrosity currently in place?

Written by Ciaran Ryan. Posted in Journalism

This article first appeared in Moneyweb.

Is there a better tax system than the monstrosity currently in place?

Our-Land-our-rent-our-jobs-book-cover-1-500x361Stephen Meintjes, analyst at Momentum SP Reid Securities, and the late Michael Jacques, authors of Our Land, Our Rent, Our Jobs certainly seem to think so. What if we could replace income tax, VAT, customs duties, excise, sin taxes, fuel levies, the Unemployment Insurance Fund (UIF), skills development levies and every other ‘tax it if it moves’ impost with a simple-to-collect tax based on land value?

There is so much invested in the current tax system that it is hard to imagine an alternative. The cost of administering SA revenue systems is about R10 billion a year, and there are an estimated 2 000 registered tax professionals lumping another R1 billion on top of that as fees. A far greater cost is the combined hours and expense incurred by companies, executives, lawyers and the courts dealing with tax matters. That’s a stubborn oak to cut down. But cut it down we must if we want to unleash the true potential of the economy, say the authors.

White expat South Africans returning in record numbers

Written by Ciaran Ryan. Posted in Journalism

passport photoMore than 400,000 white expat South Africans have returned to the land of their birth since the apex of the financial crisis in 2009, according to research by Free Market Foundation economist Loane Sharp. This is based on extensive analysis of job candidates on the database of the country’s largest recruitment firm, Adcorp.

Sharp says SA’s white population of working age (15 to 64 years) peaked at 5.9 million in 1973, but declined steadily to 3.9 million in 2009. Since then, the white population has risen to 4.3 million, a net gain of 400 000 over six years. That’s a substantial brain gain for the country, since most of these returnees bring vast international experience in finance, engineering, medicine and other professions.

Some employment agencies are specifically targeting expatriate South Africans to fill highly skilled positions in sectors such as engineering, mining and construction, and that is accounting for some of the migration back to SA.