Obituary: Mohale Mahanyele: pioneer of BEE ended career under a cloud

AS the executive chairman and CEO of South Africa's first major black-owned and managed company, National Sorghum Breweries (NSB), Mohale Mahanyele, who died in Johannesburg this week, aged 73, carried on his shoulders the hopes and dreams of all who believed in black economic liberation, power and influence.

But he blew it.

Within three years the company that the National Party government handed him, as many people felt, on a plate, had been reduced from a profitable operation to the brink of bankruptcy.

To save itself it had to sell 30% of its equity to an Indian company which decided that Mahanyele was the root of the problem and had to go. He refused, but after continuing losses and decreasing market share he was forced out.

Mahanyele was born in Sophiatown on April 30 1939. He turned state witness against Winnie Mandela in a 1969 court case at a time when she was being persecuted by the security police.

He was working for the US Information Service and had been helping to produce secret literature for her. He was detained by the security branch and became their "Mr X" after being assured that his role would never be disclosed.

Word of his betrayal got out and he became an outcast in "struggle" circles.

In 1980 he led a delegation of the National African Federated Chamber of Commerce to meet Piet Koornhof, the then minister of plural relations who promised that the sorghum beer industry, which had been in white hands since 1908, would be handed to black people.

Ten years later the Nationalist government privatised NSB through a R44-million share offer at 100c per share to black investors led by Mahanyele.

The government gave NSB R30-million from the profits of the sale to use as a kind of slush fund. Mahanyele made financial donations to black political parties and organisations including the ANC, IFP, Azapo and SA Civics Organisation. He became Mr Moneybags for certain ANC luminaries newly returned from exile, and gave to charitable causes.

His past was forgotten and he rubbed shoulders with the new elite. He was invited, in 1993, to deliver the Onkgopole Abraham Tiro (a struggle martyr of note) memorial lecture at the University of the North.

He also started an education trust. The biggest recipient was International Management Centres, a business school with headquarters in the UK where NSB enrolled employees to study business administration and management. Mahanyele obtained his MBA and DBA from the school and was appointed worldwide IMC chairman.

For the first three years NSB made good profits and was hailed as a shining symbol of BEE, not least by Mahanyele himself.

"Never before in the history of South Africa has a black-owned and black-managed company given so much hope, pride and self-respect," he said in 1993.

But damning allegations began surfacing about his dictatorial management style, financial mismanagement, suspicious payments for work that was never done, abuse of company money for private ends, ruinous business decisions, nepotism, and much else besides, including bugging the phones of his staff.

Senior staff became disenchanted and left, and the black-owned advertising agency Herdbuoys severed its ties with NSB.

Mahanyele furiously defended himself, blaming jealousy and "industrial espionage".

NSB was "the one company which people who have certain gripes or wrong envy would like to pull down", he said. He called the allegations "unpatriotic".

He defended his close relationship with the white-owned Premier Group from which NSB had bought an overpriced, floundering company, saying, "you need powerful friends in this world if you are a darkie".

Responding to allegations that he had formed companies on the quiet through which he was buying NSB shares, he retorted, "Do you expect Oppenheimer not to have shares in Anglo?"

When India's United Breweries saved the ailing company by purchasing a 30% stake it commissioned an audit which found "debilitating truths" in the allegations.

In 1997 he was forced to resign.

Mahanyele is survived by his second wife, former housing minister and ANC deputy secretary-general Sankie Mthembi-Mahanyele, and three daughters.