Populist politics must not be allowed to harm entrepreneurship
The case of Harith not only underscores the importance of independent investigations and due process in cases where allegations of corruption are made, but highlights the need for vigilance.
In recent years, we have seen a growing trend of populist politics, in which politicians use inflammatory rhetoric and false or misleading information to gain personal or political advantage under the guise of conducting parliamentary oversight. In extreme instances, populist politicians have used their platforms to advance the interests of the criminal networks, including, as media reports show, cigarette barons who deprive the national purse of much-needed tax revenue.
Unfortunately, this trend has not spared the business world, and in recent years we have seen how false accusations can harm the reputations of companies and their leaders, even when they have done nothing wrong.
As a case in point, Harith General Partners experienced first-hand the damaging effects of populism on entrepreneurship. In 2018, South African Member of Parliament Bantu Holomisa levelled unfounded, defamatory accusations that Harith and its directors were involved in corrupt activities. These accusations were baseless, as subsequent independent investigations and adverse court findings against Holomisa have shown, but they still likely caused significant harm to Harith's reputation and business operations.
Defamatory accusation
Holomisa had alleged that then Harith CEO Tshepo Mahloele and non-executive chairperson Jabu Moleketi had used their previous positions at the Public Investment Corporation (PIC) to enrich themselves - an unfounded, defamatory and costly allegation Holomisa surely now lives to regret.
Holomisa's accusations were particularly damaging because they targeted Harith’s involvement in the Pan African Infrastructure Development Fund (PAIDF), which was funded by the PIC, public infrastructure investment agencies, and other private banks. The PAIDF is a crucial initiative aimed at promoting infrastructure development across Africa, and Harith played a key role in its establishment and success.
And despite Harith's founding not being anomalous to similar startup companies in the sector, its reputation was put at risk by Holomisa's populist rhetoric and baseless accusations. The company and its directors were forced to spend significant resources defending themselves against these accusations, and their reputation suffered as a result. This case highlights the importance of public officials exercising caution and responsibility in their public statements and actions. This, however, should not dissuade public representatives and whistleblowers from raising and pursuing legitimate public interest matters.
In cases where allegations of corruption or wrongdoing are made, it is important to allow the legal system to work to determine the truth. Independent investigations and due process are crucial to ensuring that the truth is revealed and that those who are innocent are protected from false or misleading accusations.
Vigilance against populism
Despite the fact that the Mpati commission of inquiry and subsequent investigations did not find any wrongdoing on the part of Harith and its directors, the damage had already been done. Harith’s reputation had been besmirched, and its business operations put in peril, particularly since the Commission ordered the PIC and GEPF to conduct other forensic investigations which, like all preceding investigations, exonerated Harith and its directors.
This is a stark reminder of how false accusations, spread through populist rhetoric, can invite harm even to the most ethical and responsible businesses.
The case of Harith not only underscores the importance of independent investigations and due process in cases where allegations of corruption or wrongdoing are made, but it also highlights the need for vigilance against populism and balancing the urge for political expediency and the rights of others. False or misleading information can cause significant harm to individuals and businesses, and it is important to avoid spreading such information.
But what can be done to prevent such situations from arising in the first place? One solution is to promote transparency and accountability in public life. This means ensuring that public representatives are held accountable for their actions and that the legal system is allowed to work to determine the truth. In this instance, our courts acquitted themselves well - as usual.
It also means promoting ethical entrepreneurship, which is guided by principles of responsibility, transparency, and sustainability. Those entrusted with the management and investment of public funds must always place a high value on these principles and commit to promoting ethical business practices and supporting those who shine the light on malfeasance.
Need for ethical awareness
Meanwhile, in recent weeks, South Africans were shocked by media reports of Zimbabwean and South African politicians colluding with rogue business people in schemes designed to subvert sanctions while depriving the South African Revenue Service of tax revenue from undeclared excise duty and other taxes. This has starkly pronounced the need to infuse ethical awareness and resilience in our body politic as the law enforcement agencies have clearly been hopelessly compromised.
While ethical entrepreneurship can play a crucial role in promoting economic growth and development, including upholding the highest standards of integrity and responsibility, populist politics must not be allowed to harm businesses that are committed to doing the right thing.
As a society, we must work together to promote transparency and accountability in public life and to hold those who abuse the power vested in them by the Constitution and the public accountable for their actions. By doing so, we can build a brighter future for all stakeholders and create lasting value for society as a whole.