I was lucky to attend the last and very tense board meeting of Lonrho in London in 1995 where a titanic power struggle was going on. On one side was Tiny Rowland, the man who started and managed the company and built it for over 30 years.
He was flamboyant, aggressive and totally dominated the company. On the other side was Dieter Bock, a quiet soft-spoken German millionaire who was famous for carrying his papers in a plastic bag and shopping at the cheapest stores in London.
Bock had bought a large chunk of shares from Tiny and was appointed co-chief executive of the company. Tiny had sold his shares because the company was broke. Bock now demanded management control.
He was the largest shareholder and represented new investors who believed that Tiny was a dinosaur and his methods of business outdated.
It was a classic duel between the new and the old. Tiny was already 75 years old while Bock was in his early 50s.
I represented a client who owned 7.5 per cent of the company and my instructions were clear “don’t speak, listen, and vote with the winning side”.
Tiny spoke first and he recounted how the company made its money in Africa.
His modus operandi, he revealed, was simple, “I dealt directly with African presidents. I went to State House and offered 10 per cent of the project value. If the president took my money and didn’t give me the deal, then I would spend another 10 per cent and get him overthrown. That’s how you do business in Africa.”
Bock said that such methods were now outdated and that Africa was changing. He demanded corporate governance and an end to corrupt deals with African despots.
When the vote was called, it was clear that the board members were tired of being bullied by Tiny and voted to oust him and appoint Bock. Tiny did not take the news kindly. His parting shot? “This Nazi will destroy the company in three years, he doesn’t know how to do business in Africa. Africa will never change”.
Well, Lonhro declined as a company. It is a pale shadow of what it used to be. Has Africa changed?
Corruption is a difficult vice to deal with. If you are stopped at night after a few drinks and you have a choice of spending the weekend in the cell or parting with a few thousand, what would you do? Be honest.
If you had to pay a large bill of millions or pay a small “fee” what would you do? You need your passport urgently and it would take two weeks, would you pay to get it in a few hours. We are all guilty of aiding and abetting corruption.
Many of us would argue that these are small vices, but we are tolerating a culture that is destroying us.
Are you ready to end corruption? Or are we so comfortable with it that we are not ready to change? Is the change going to kill us as it did to Lonhro or must we change? We cannot afford to lose one-third of our gross domestic product to corruption.
Corruption means poor hospitals, schools and social services. As you go to vote this August, please reflect on this. We must change.