Communications minister Siphiwe Nyanda owns a stake in Africa's largest cellular company, MTN, which has raised concerns of a conflict of interest.
According to the latest Parliamentary register of members' interests, Nyanda owns about 670 shares in MTN. No nominal value is listed for the stake, but on the open market, the holding would be worth R83 180, at Friday's close of R124.15.
The revelation comes just after the Democratic Alliance indicated that a business, in which Nyanda has a stake, won a R68 million contract to provide security services to the Gauteng Department of Roads and Transport.
General Nyanda Security Risk Advisory Services (GNS) is 50%-owned by Nyanda, and this is the second such tender to come to light recently. Last week, Transnet said it had fired two senior managers at its freight division after a contract worth a total of R55 million was irregularly awarded to GNS.
Nyanda's share of GNS is listed in the register, as are his holdings in Old Mutual, Sanlam, and a 20% stake in Umnotho Holdings. However, the minister does not hold any shares in any other telecommunications companies.
Explain it
Chris Gilmour, Absa Investment analyst, says the minister is opening himself up to accusations of a conflict of interest by only holding MTN shares in the telecommunications sector.
“The fact that he only has shares in one telco, rather than all three, says there could be suggestions of favouritism.” Gilmour says Nyanda should avoid owning shares in a sector that he is ultimately responsible for, to prevent possible allegations of a conflict.
“It's probably the honourable thing to do,” Pater says, as Nyanda plays an important role in policy decisions in the sector.
Opposition party Congress of the People spokesman Phillip Dexter says Nyanda's shares in MTN “on the face of it requires explanation”.
He adds that it does depend on when and how Nyanda bought the shares, but, in light of his recent involvement in irregular tenders, the holding requires further clarification.
Shareholder activist Theo Botha says Nyanda should probably also be invested in the other telecommunications and IT companies on the bourse, rather than only MTN. However, he is more concerned about the contracts in which Nyanda's company is involved that were improperly awarded.
Both the Transnet and Gauteng deals were awarded without the usual tender process being followed. Botha adds that share registers of publicly-listed companies should be open to scrutiny in the same way as directorships of companies.
According to the Companies and Intellectual Property Registration Office (Cipro) database, Nyanda is a director of four other companies: Gen S Nyanda Consulting, Khomani Protection Services, Micromatica 27 and Muntu Mutapa Holdings.
These companies do not appear in the Parliamentary register, and GNS is not listed in the Cipro database as a company in which Nyanda is a director.
Nyanda's spokesman Tiyani Rikhotso did not respond to requests for comment. However, it is possible the minister is no longer a director of the companies listed by Cipro as its database is alleged to be in a shambles.
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