Sep 26 2008

MAN Ferrostaal, Mbeki and “the big silence”

Published by at 9:57 pm under Companies

First published on my old blog on 12/8/2008. 

Roughly nine days have elapsed since a South African newspaper published its first claims of bribery involving the SA president Thabo Mbeki and the German company MAN Ferrostaal on 3 August. 

According to the paper MAN Ferrostaal gave Mbeki R30 million for a arms contract. In turn, Mbeki gave Zuma R2 million and the rest to the ANC. 

In South Africa the media have been buzzing ever since. On 10 August the same newspaper came with more specific “revelations”. Again the SA media scene was abuzz. 

And in the German media world? Until the time of this blog contribution (12 August) not a single newspaper or any other medium has reported about the MAN Ferrostaal debacle (or alleged debacle) once. Nothing. 

Maybe, because the German media believe MAN Ferrostaal when it says the reports are all fabrication? OK, but even then the media should at least have taken notice of the allegations and MAN’s denial. 

After all, MAN Ferrostaal said it’s considering legal action against the paper. And it insisted on a correction being published by the paper, which (as far as I know) the paper has to date refused to do. So, “groot kak” is coming, one way or the other. But, the German media is mum. Not a word. Very strange behaviour, to say the least. 

For the sake of the journalistic principle that all sides must always be given a fair chance to comment (which the particular newspaper only did very half-heartedly), here the complete declaration of MAN Ferrostaal in response to the allegations of bribery (this appeared on the company’s website shortly after the second round of allegations on 10 August): 

“On Sunday, August 3 and August 10, 2008, allegations appeared in a South African newspaper that MAN Ferrostaal had bribed SA President Thabo Mbeki, Jacob Zuma and others in the ANC. These allegations are wrong and entirely unfounded.

“MAN Ferrostaal never made any payments to SA President Thabo Mbeki, to Jacob Zuma or to any other member of the ANC or to any other public official. MAN Ferrostaal in addition states that the articles mentioned contain a large number of factual errors with regards to MAN Ferrostaal and therefore violates the basics of journalistic accuracy.

“The company has requested the newspaper to publish a rectification of the article. The options of legal action are currently being evaluated.

“Contrary to what the article on August 10 claims, both of the offset programmes MAN Ferrostaal is pursuing in SA are well under way. The one for ARMSCOR, the national procurement office, has successfully been fulfilled, and, as stated in a letter by ARMSCOR, actually has been overfulfilled. As stated by the DTI a few days ago, the DTI had rejected an originally planned steel works in Coega. MAN Ferrostaal is successfully pursuing projects to replace this.

“With its offset projects executed so far, MAN Ferrostaal has made a substantial contribution to the SA economy, having invested several hundreds of million Rand and having saved and created several thousands of jobs. Examples of these projects are a production facility for microchips in Pretoria, tea plantations and a fabrication yard for oil and gas platforms in Saldanha Bay, Western Cape, which was handed over to the local operator late last year. The yard is now negotiating its first contracts. 

“These contracts will give South Africa the possibility of participating in the booming African oil and gas market. The first yard will be supplemented by a second facility for the maintenance and service of oil and platforms in Cape Town Harbour. The company is currently working on obtaining permission to build this second yard. Together, the two yards and supplying local companies are expected to create several thousands of jobs in the mid term.

“Due to the success of the current projects, MAN Ferrostaal was invited last year by the DTI to enter into a strategic partnership with the Department in order to continue the cooperation after all offset obligations have been fulfilled.”

Who is MAN Ferrostaal? 

With 4,200 employees MAN Ferrostaal is represented in more than 60 countries. The company had a turnover of €1.4 billion in 2007. It is a subsidiary of MAN Aktiengesellschaft, Munich. The MAN Group is one of Europe’s leading manufacturers of engineering equipment and vehicles, generating annual sales of around €16 billion. 

MAN supplies products, systems and services to the capital goods industry and employs about 55,000 people worldwide. The core areas operated by the MAN Group (commercial vehicles, industrial services, diesel engines and turbomachines) all hold leading positions in their markets. MAN is a member of the DAX German Share Index, Germany’s top 30 public limited companies.

I should, perhaps, add that it was reported on 23 June (by Handelsblatt and Financial Times Deutschland) that MAN has employed investment bank Goldman Sachs to help it sell its division Ferrostaal. The process is underway. Finally, Volkswagen has been trying for a while now to buy MAN (or parts of it).

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