South Africa Business Leaders Told Zuma Trust Was Destroyed

(Bloomberg) -- Business leaders told President Jacob Zuma at a meeting last week that trust between the government and the private sector was destroyed when the South African leader fired his finance minister in March, Telkom SA SOC Ltd. Chairman Jabu Mabuza said.

“We had a private dinner with the president and we raised lots of issues,” Mabuza, who is one of the leaders of the so-called CEO Initiative, said in an interview Thursday at the World Economic Forum on Africa in Durban, the eastern port city. “We raised our concern that our working together, the trust, has been destroyed by the developments of the last few weeks.”

Zuma ordered Pravin Gordhan, who was with business and labor leaders in London to meet investors on March 27, to return home and dismissed him four days later, prompting the rand to plunge. Since being reappointed in December 2015, Gordhan led efforts to retain the nation's investment-grade credit rating, meeting regularly with business and labor-union leaders and foreign investors. S&P Global Ratings and Fitch Ratings Ltd. cut their assessment of South Africa's debt to junk after Gordhan was removed.

The North Gauteng High Court in Pretoria ordered Zuma on Thursday to explain why he made the changes to his cabinet.

Other concerns raised by the group of business leaders include state capture, a South African term for influence peddling, the management of state-owned companies, particularly power utility Eskom Holdings SOC Ltd., the delay in signing the Financial Intelligence Centre Amendment Bill and the Mineral and Petroleum Resources Development Act, Mabuza said.

A day after the April 28 meeting with business leaders, Zuma's office announced that he signed the Fica bill, aimed at fighting tax evasion and money laundering. The law will make it easier to monitor the financial activities of politically connected individuals.

The president pledged to meet with business leaders after he returns from the WEF gathering to respond to some of the other concerns that were raised, Mabuza said, without being more specific about the date.

To contact the reporter on this story: Rene Vollgraaff in Johannesburg at rvollgraaff@bloomberg.net.

To contact the editors responsible for this story: Gordon Bell at gbell16@bloomberg.net, Antony Sguazzin