Andre de Ruyter reveals how the government silenced South African business leaders

Former Eskom CEO Andre de Ruyter said the government’s attack on business leaders who criticised policies like BEE has been effective in silencing others who share the same views.

De Ruyter shared his views during a discussion with renowned economist Dawie Roodt on the popular Ontbytsake show.

Many South Africans would like top business leaders to publicly criticise destructive policies, like Black Economic Empowerment (BEE) and affirmative action.

However, for a business leader to criticise the government comes with tremendous risk, both personally and for the business.

De Ruyter cited the case of former Sasol chief executive and chairman, Pieter Cox, who highlighted the risks associated with BEE.

Cox was a brilliant chief executive. During his nine-year tenure as Sasol CEO, the company’s market capitalisation increased four-fold from R30 billion to over R120 billion.

He placed a high emphasis on advancing Sasol’s world-leading proprietary technology and established relationships with universities worldwide to support their research.

This foresight enabled Sasol to position itself to commercialise its technology offshore, making it a global energy giant.

However, he faced severe criticism from former South African President Thabo Mbeki for highlighting the risks associated with BEE.

In late 2003, Cox cited BEE as a risk factor in a document that Sasol was required to compile in accordance with New York Stock Exchange (NYSE) regulations.

“There could be risks to shareholders that value may not be achieved in the case of black economic empowerment equity transactions,” the document stated.

Mbeki struck back, saying it is difficult to understand why any thinking person would categorise the achievement of these goals as constituting a business risk.

“Sasol will have to outgrow an outdated mindset that has become entrenched as their own particular and peculiar corporate culture,” Mbeki said.

Cox stepped down as Sasol chief executive on 30 June 2005 after nine very successful years at the helm of the company.

Andre de Ruyter explains the government’s power

Most South African business leaders are scared to speak out against the government and its destructive policies. This is not surprising.

Although De Ruyter thinks it is time for business leaders to become more outspoken, he understands the risks associated with it.

He stated that the government wields significant power through regulatory discretion. It can make the life of any business difficult.

“Incidents like the Cox case, where the government acted extremely harshly towards business leaders who differed from its policies, scared other leaders,” he said.

The fact that the government hold power of licensing in many regulated sectors puts further risk on those who criticise policies like BEE.

“If you want a mining or water license or a contract from the government, you’d better watch out or there will be trouble,” De Ruyter said.

He said the fear factor associated with criticising the government and its anti-business policies have played a role in silencing business leaders.