Is corruption limited to Gupta-linked companies?

Definitely not!

No company is beyond being crippled by rumours of corruption

How will you know and what must you dowhen corruption comes knocking?

INTRODUCTION

R1.56 trillion budgeted for next financial year

Government Spend per

year

R700-R800 billion

Money lost to corruption

since ‘94

“GUT FEELING” HYPOTHETICALWHAT DO YOU DO?

a) Turn a blind eye and carry on as if nothing ever happened; or

b) Approach a senior staff member for clarity; orc) Send an anonymous tip-off to the local radio station; ord) Remove yourself; ore) Mention your suspicion to your friend in the SAPS?

CORRECT ANSWER = NONE OF THE ABOVE!SEE: SECTION 34 OF THE PREVENTION AND COMBATING OF CORRUPT ACTIVITIES ACT“Any person who holds a position of authority and who knows or ought reasonablyto have known or suspected that any other person has committed [certain corrupt transactions] involving an amount of R 100 000 or more, MUST REPORT such knowledge or suspicion or cause such knowledge or suspicion to be reported to the police official in the Directorate for Priority Crime Investigation referred to in section 17C of the South African Police Service Act, 1995, (Act 68 of 1995).”Failure to report = offence subject to a fine or imprisonment of up to 10 years

“PERSONS OF AUTHORITY”

Partner Director/Secretary/Manager

(as defined in the “old Companies Act”) Public Officer Principal/Rector of University “CEO” or equivalent on any board,

committee, fund, institute, department, organisation etc.

Acting in temporary position as one of the above

Yes… you and me!

“PARALLEL EFFECTS OF THE COMPANIES ACT”

“Director” includes “Prescribed Officers”

Anyone who fulfils the role of a director but who is operating –whether intentionally or otherwise – under a different designation

Directors’ duties in terms of the Companies Act include the duty to: communicate to the board at the

earliest opportunity any [material] information that comes to the director’s attention (Section 76)

“CORRUPT ACTIVITIES”

Act specifies various corrupt activities, including a “Catch-all” provision covering “general corruption offences”: Directly/indirectly making/accepting an offer (in cash or

otherwise), in order for the person making or accepting such an offer

(or another), to act in a manner amounting to unlawful behaviour

amounting to the abuse of a position of authority, designed to achieve an unjustified result or that amounts

to any other unauthorised or improper inducement to do or not to do anything.

“KNOWING” OR OUGHT TO HAVE KNOWN

Failure to report will lead to the committing of an offence if: You in fact had knowledge of corrupt activities; You ought reasonably to have known about the corrupt

activities; You had a suspicion about possible corrupt activities; You ought reasonably to have suspected possible corrupt

activities.

HOW TO RESPOND?

Create policies; Take advice; Procure an internal investigation; Table report / findings /

recommendations with board Implement plan of action.

Disclaimer:

No two situations are ever the same and the suggested approach may vary from case to case.

However, this would suffice as a safe “general rule of thumb”.

COMPARITIVE ANALYSIS OF ANTI-BRIBERY LAWS

PRECCA*Any person who is bribed*Wide definition of “general corruption”*2 stage prevention (bribing and being bribed)

UK BRIBERY ACT*Any person who is bribed*Payments to retain/obtain business only

*2 stage prevention (bribing and being bribed)

FOREIGN CORRUPT PRACTICES ACT*Only i.r.o foreign officials who are bribed (NB: effect on South Africans?)*Payments to retain/obtain business only*only the ‘act’ of payment