Special Hearings — Business Hearings — 1997-11-11

CHAIRPERSON: Thank you very much.  A very helpful intervention.  These people have pre-empted me, these two sitting here.  I didn't give them permission to take off their coats, but in fact I was going to say, they might take off their coats.  You are, if you feel like taking off your jackets, it will be all right, I won't be offended, even if I can't take off mine.  Thank you, Hlengiwe?

MS MKHIZE: Thank you very much, I will start off with a general question.  We've been sitting here almost a whole day, listening to different representatives and I suppose that will include you as well.  Creating a case that, really, business was business.  My question is, what will be your explanation of the discrepancies that we are sitting with as a society today where you have one segment of society with a well developed system of property development and also a huge percentage of our population in squatter camps and informal settlements.

GERHARD VAN NIEKERK: Chairperson, I think it has been answered I think from some of my other colleagues.  I think it was clearly as a result of the policies of the government over many many years that people were discriminated against and that that was the main cause for this big discrepancy that developed over time.  There is no doubt in my mind that that is what caused it.

MS MKHIZE: In your own view, do you think there's anything that your company will be apologetic for?

GERHARD VAN NIEKERK: It is as I say, we've come over a very long history and  we have experienced many things in many countries.  As I've said, the one critical thing that one, with hindsight, would say that while it became clearer that human rights were being abused in our society, on a progressive scale, we did not seek a mandate from our people to aggressively take a stand.  I think that is the, from a personal point of view that is probably the one case that I would say that we could have done differently.

MS MKHIZE: Also, there is a section in your submission, where you refer to Old Mutual's interest in the black market.  As a way you've shown that, your company is 'clean' so to say, but also there is another perception, a possible perception that (unclear) to move was driven purely by economic interests, rather than a pursuit of certain political goals, by political goals, I'm not referring to party politics but a desire to act against a system which was discriminatory and in a way conducive to gross human right violations.

GERHARD VAN NIEKERK: I think I have to get back chairman to answer that question to refer to the organisational form of the business that we've been managing.  As a mutual we were to the extent that we were conducting business with anybody, we were conducting it to improve that individual persons financial position, by either insuring them or that in the case of death of a breadwinner, the family could stay on in the house or the children could continue going to school.  Conversely  it was a capability for people to build up some sort of nest egg where they had some spare money to invest, for their old age.  So in a sense, we were always making money for our clients, rather than for anybody else.  There was no, that was the one difference in our organisation, is that the interest of the so called shareholders and the clients coincided from a financial perspective.  I mean that was one of the differentiating factors I think, over all these years, from different kinds of organisations.

MS MKHIZE: Although I will like to dwell so much on that, there's really a view prevailing, especially in the black communities, that, most certainly members of my age group, much as their parents were not by law, prohibited from being members, taking membership, but they didn't come out with anything and that has led to extreme forms of impoverished in other societies.  But I will like you to answer to that.  Then you referred to Old Mutual South African Trust which is in Boston.  I just wanted to know what was your position regarding the (unclear)

GERHARD VAN NIEKERK: The Old Mutual South African Trust is actually an organisation based in the UK, whereby we mobilise funds from the international community for investment back into South Africa, it was a recent, after the new government came to power, those kind of possibilities became possible to us. We access the international markets, we created the fund of some fifty million pounds I think it was initially that was mobilised and that was then invested back into South Africa.  The Boston leg of our operation is an attempt for us to also access the institutional funds of the American market, to, for the investment back into South Africa.  So that has been those two initiatives.

MS MKHIZE: Earlier on this morning, we heard an argument that  today government should actively empower black business as the nationalist party built.  What are your views on that?  And there are even stronger views of people that are saying, who won't talk reconciliation in this country if the government is not doing that.  What are your views?

GERHARD VAN NIEKERK: I think in terms of our own actions, I think we have demonstrated that we are in favour of that, we have been involved in at least more than a billions rands worth of investments in the entirement of new entrepreneurs in this country over the last year or two, we have invested another billion rand in infrastructure development, so I think quite frankly it is something we will support as long as it makes sense economically.  I think ultimately the country is , has got very scarce capital resources, but we have demonstrated that it is possible to do those kinds of things if , but in terms of something that I personally will feel quite happy to put my own money behind that.  So it is not necessary to say that these kinds of actions must always be done at a subsidised type of level.  I believe that it is possible to do it at an arms length economic level and as long as you look very hard and actually find the mechanisms to do them.

MS MKHIZE: Thank you, I will hand you back to the chair, so that my colleagues can ask you a few more questions.

GERHARD VAN NIEKERK: Thank you.

CHAIRPERSON: Thank you very much.  Russel?

UNKNOWN: Is it the case that Old Mutual through (unclear), the other company by that it is controlled, which was one of the three groups that dominated the private sector defence industry in the supply of arms to Armscor.  Was it done because it made economic sense or because there was a belief in the need for a strong defence force, given the political threat the country was perceived to be under?

GERHARD VAN NIEKERK: We don't control (name unclear), neither have we ever controlled (name unclear), so I don't think that is a valid statement to make.  We've had an investment in it, and for that angle it was a purely economical  issue, we owned shares basically.  Initially it was an investment in the Barlow Rand Company, and after that was unbundled, we ended up with a substantial stake into the (name unclear) company and that of course was one of the issues that happened quite recently.  But there was absolutely no question about, other than a purely investment motive in that.

UNKNOWN: There's also the charge, I mean that's linked to it that you, the chairman once JD Van Der Horst, was alleged to have been a close advisor to prime minister Botha, that he was a director of Sasol, that he sat on the Defence Advisory Council; and this interpreted by some as support for the total strategy of the Botha regime.  How would you respond to that allegation?