If a tree falls down in a city, does anyone notice? That question might seem anomalous, but it was on the mind of The Man From FCPA after reports surfaced that South African President Jacob Zuma agreed to set up a nationwide corruption commission to look into allegations of rampant corruption through looting of government agencies and state-owned entities, most particularly through Zuma’s links with the Gupta family. Zuma had long resisted such calls, even from government officials and members of his own political party, the African National Congress.
Why would President Zuma do an about-face and agree to such a demand? The President’s announcement also followed a court ruling on Dec. 14, 2017, which ordered the President to appoint a commission of inquiry within 30 days and to pay the costs of the investigation. Also, there was talk within the African National Congress of forcing President Zuma to step down before his current term expires in 2019. It may be he believes the creation of a commission will forestall this demand for his early retirement.
Of course, there can be nothing good to come out of this commission for the President unless it is simply to delay, delay, delay his impending departure by an agreed upon resignation/retirement rather than a sacking by his own party or impeachment by the South African parliament. It is difficult to believe that any sitting President would voluntarily cooperate with such an investigation knowing what has happened to his country under his time in office. It may be that President Zuma does not believe there was any corruption by his immediate family or his friends the Gupta family, and it is simply his political enemies out to get him.
Given the current reality that international businesses are starting to pull back from business that did business with the Gupta family or its affiliates, such as PwC and McKinsey and Co., there may be lots of fire underneath all that smoke.