Economic review

“Economics as currently presented in textbooks and taught in the classroom does not have much to do with business management, and still less with entrepreneurship. The degree to which economics is isolated from the ordinary business of life is extraordinary and unfortunate. Coase

The PIC controls some 12% of the shares listed on the JSE. The use of State employee retirement funds to drive policy is debatable. Where it becomes problematic is (an admission made this week that the intent had been to create a black media giant rather than secure returns) when the interest of those on whose behalf it holds funds is subverted to policy.

Business review

An Egyptian scientist (Mona Naim, now 72 years of age) has cracked a simple and efficient new process for turning salt (and contaminated) water into clean drinking water. This process is said to be 70% more efficient than the current methods and can be powered by solar energy.

AMD: our Department of Water Affairs has proposed that mining companies will pay 67% of the cost of treating contaminated water on the Witwatersrand, with the balance being borne by users. One trusts that the “polluter pays” principle will work given that mining is currently not what it used to be…

Dirty Little Secret: this white wine, a chenin blanc, will set you back R900 a bottle. Try it and move on from expensive reds.

Denel has been contacted to service SAA Express’ planes. One SOE saving another? Yet the papers blather on about synergy.

The latest to join the scandal about emissions manipulation are Mitsubishi and now Suzuki. Eina.

Currently whites make up about 70% of all management positions in South Africa, whilst they represent only about 10% of the economically active population. Clearly our employment equity efforts are not producing the results that they are supposed to. Hefty fines and so on don’t really seem to be doing the job. Why? Gerber suggests that we may well be applying the wrong tools to achieve the desired result as we do not really know the answer to this question.

Will higher minimum wages kill jobs? This is a loaded question: on the one hand one wants broader participation in the economy and on the other a decent living wage/fight exploitation. The latest research suggests that jobs are indeed lost when wages are increased compulsorily. Whether this is a good or bad thing still, I think, remains unresolved.

Property review

ABSA is running a Further Advance campaign in which existing customers with equity in their property will be entitled to several benefits including a contribution to registration costs. Remarkably ABSA will be making a contribution to cost rather than asking the conveyancer for a discount.

Practice review

The Auction Alliance scandal had involved attorneys who received commissions (which may arguably be legal?). The latest is that bank officials had also been given a backhand for pushing business its way. But, wait, there is more: the Canal Walk development has also been drawn into the fray.

Eight years after the complaint against Judge Hlope was lodged, he will now appear before the JSC. Our justices also have rights. However, taking this long to resolve an issue which affects a High Court – especially when it involves the chief justice – is surely inappropriate.

Cases and such

Is property purchased before divorce but transferred thereafter, part of the joint estate?

A couple had acquired a property before their divorce and received transfer thereof thereafter. The court decided that claims, as, in this case, a claim to take transfer, fell to be divided and forfeited also.

M v W [2016] ZAWCHC 44

Once-off credit providers and the registration

Our courts have decided that a once-off credit provider who should, on the face of it, be registered, will be penalised by voiding the contract entered into by it for the provision of credit. A recent article by two UOFS academics argues that the decisions of our courts is incorrect. I confess to having sympathy, given that it is unlikely that our legislator had intended such 1-time lenders to be caught in the net.

Ask me for a copy.

Section 163 of the Companies Act: oppression remedy

Section 163 of the Companies Act allows a shareholder or director of a company to apply for relief where the conduct of the majority in a company is oppressive or prejudicial. I hold an article on the subject should you be interested.

Ask me for a copy.

Sales of land and undisclosed principals.

The options open to a person who wishes to buy without his identity being disclosed are:

• describing the purchaser as enabled to appoint a nominee; or

• providing that the purchaser would be able to cede his right to purchase to another.

The writer of this article explains the available options and the effect of these for Transfer Duty purposes. Worth a read for those who deal in such things.

Ask me for a copy.

Wills executed by the very old

A perennial problem is the validity of wills made by those who are cognitive-impaired. I hold and article by an UP Prof on the subject. Ask me for a copy

Quotables

The fear of death follows from the fear of life. A man who lives fully is prepared to die at any time. Mark Twain

Comment

The resource curse: are those born in a State rich in natural wealth, condemned to be amongst the most wretched of the earth? Several economic theories have been floated to explain this apparent economic result. A book titled Blood Oil argues that the global trade in natural resource was comes at an unconscionable human cost. It argues that such resources cannot be exported without violating the property rights of those who live with these are extracted and who are generally too cowed to have any meaningful say in decisions about the national patrimony. Following on this the argument runs that one should only buy from those countries in which citizens are free.

Using State security to harass the opposition is an African thing? No. In Australia the police have raided the Labour opposition, raising questions on political interference – strenuously denied of course.

There are two issues that have dominated our news of late. One of them is the protests in Vuwani. What appears to be quite a minor difficulty i.e. the redrawing of municipal boundaries, has sparked an unprecedented reaction. Why? The first reason is attributed simply to physical distance but the second is quite worrying: the locals are Vendas whilst the municipality is controlled by Shangaans. True or not, the mere fact that tribalism can spark of such a reaction does not bode well.

The main political news of the week centres on our president apparently attempting to rid himself of our Minister of Finance. This struggle raises questions on many levels. In the first place it is symptomatic of a struggle within the ruling party for control. Of what? This is a most disconcerting question as it has been suggested that the reason for the struggle is key removal of a financial gatekeeper standing in the way of freer access to state resources. This goes further. If correct, it this suggests financial impropriety which we have come to believe. It also suggests that the NPA is already partisan in this struggle. This is an extinction level event and may well prove to be a watershed in South African politics. Most of those who have squirrelled away funds, will remember with some dismay the events in Zimbabwe, where financial mismanagement and corruption have destroyed savings and a once vibrant economy.

Fast forward to the Fort Hare celebrations. Generally one invite those who might be emulated to address students. Inviting Mr Zuma is appropriate; inviting Mr Mugabe raises the question who those who are coaching primarily black students to think, would wish them to emulate.

Lighten up

Jan: 'Koos, treur jy nog oor jou eks-vrou?' Koos: 'Man, ek het regtig gedink ek is oor haar, maar toe ek nou die dag hoor sy het R10 miljoen van haar pa geërf, is al die ou wonde weer oopgekrap...'

'n Kleinseun vra sy ouma: 'Het Ouma nie my whoonga-pille gesien nie?'

Ouma antwoord: 'Nee, nie kans gehad om te kyk nie. Daar's 'n draak in die

kombuis!'

Q: What do you call an Amish guy with his hand in a horse’s mouth?

A: A mechanic.

Q: What did zero say to eight?

A: Nice belt.