Finweek English Edition – August 15, 2019

y

know that you’ve pushed hard enough when you get slapped

y

e wrist.” That’s what investment manager and former trader

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u Adoboli was told when he was pushed to drive profits at Swiss

yyytment bank UBS.

aian by birth, has been living in the UK since his early teens, and

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started as a trainee in UBS’s office in London in 2006. He admitted to having acted

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outside of the law to ensure bigger profits. But instead of profits, pushing “hard

enough” (which included unauthorised shortfalls) resulted in a $2bn loss at the

bank. Adoboli spent seven years in prison for fraud.

Speaking at the recent CFA Society South Africa’s conference, Adoboli, who was

since deported from the UK to Ghana, tabled a list of experiences as a young trader

that slowly eroded the ethical culture of his work environment.

“In investment banking ... we’re outcomes-based ... as long as the outcome is

good, no one cares. Until things go wrong,” he said.

At the conference, Adoboli was in conversation with Wendy Addison,

whistleblower of one of SA’s own corporate scandals – LeisureNet. Addison shared a

similar story of a trail of small events that kept on escalating to bigger ones.

Both felt there were times early on where people (or they) should have

questioned small unethical (even corrupt) actions. But, instead, silence created a

space for ever bigger actions that eventually resulted in large-scale fraud.

Dare one guess that a similar pattern played out over the decade of so-called

state capture in SA?

Speaking at the Allan Gray Investment Summit in Johannesburg recently, chief

economist at Stanlib, Kevin Lings, said SA is now 73rd on the World Corruption

Perception Index (with 1 being the least corrupt). He pointed to the change in state

spending since 2009 – when Trevor Manuel departed as minister of finance. At the

time, SA’s gross loan debt as percentage of GDP was 26%. Now it is 59%, excluding

the debt of state-owned enterprises. “Add it back, and the number jumps to 70%.”

Lings said in 2009 SA was in a position to create infrastructure, and to build

things like schools and ports. “But we didn’t.” Yet, we managed to spend ourselves

into a debt trap.

Imagine if normal people didn’t allow those small, initial acts of unethical behaviour

to go unchallenged. Whether at government or corporate level.■

from the editor

ANNELI GROENEWALD

contents

Opinion

6 Do financial analysts add value?

In brief

8 News in numbers

10 Anglo’s remarkable turnaround

Marketplace

14 Fund in Focus: Consistent returns from

commodities

15 Killer Trade: Sibanye-Stillwater, Shoprite

Holdings

16 House View: Blue Label Telecoms, ETFPLT

17 Invest DIY: The search for true value

18 Trading 101: Why you always need to stick to

your strategy

34 Technical Study: Platinum groups could

prosper

35 Invest DIY: When a business is too indebted

36 Simon Says: AB InBev, Anglo American,

Clover, Intu Properties, JSE, Murray & Roberts,

Mondi Ltd, Shoprite, Vivo Energy, Pioneer

Foods

Collective Insight

19 How to avoid the next financial scam

Cover

38 Why share prices tank

In depth

44 Why is South Africa still waiting for cheaper

data?

On the money

46 Motoring: Nissan’s beefed-up bakkie

48 Management: Dealing with disciplinary action

50 Piker

Wealth

Asset Management

Insure

We have advisers to handle the worry so you don’t have to.

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Please visit psg.co.za to find an adviser near you. For more information

contact your financial adviser, call 0800 551 552 or email [email protected]

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