How FlySafair echoes the Argus foreign investment failure
The Western capitalist fan club forever warns that this or that transgression will deter foreign investment… and the government in particular is expected not to annoy the Godlike 'foreign investor'.
But, as in the fable of The Emperor has no clothes, few people look beyond the rhetoric to point out that, on occasions, the foreign investment emperor's raiments are, at the least, looking a bit threadbare.
A case in point was the acquisition, back in the mid1990s, of the then Argus newspaper company in South Africa by Tony O'Reilly's Independent group from Ireland.
The SA company was bought at better than a firesale price – because the Irish company used the then 'financial rand' mechanism and there was general fear about the future of a newly democratic South Africa.
By the time the company was sold to Iqbal Survé in 2014, it had funnelled billions of rands back to Ireland, in profits – many times what was paid for the company.
ALSO READ: FlySafair under fire for offshore payouts amid staff wage freezes
But, this foreign investment also cost two-thirds of the employees of the Argus company their jobs, as the Irish applied swingeing cost-cutting.
That little exercise in foreign investment was actually a bottom-line loss to South Africa, in terms of precious foreign exchange and something over 2 000 jobs.
We are wondering if there is not a similar – also Irish-linked – phenomenon under way at the moment with Safair, the company which operates low-cost carrier FlySafair.
As some of its pilots continue their strike for better conditions and pay, it has been revealed that the company transferred more than R1.3 billion to its shareholders in Ireland in the past three years.
As the money funnel was opened, the airline told the world it was financially strapped and employees that there wasn't enough money for decent increases.
ALSO READ: Rostering issue at heart of pilot strike, says Solidarity
Mind you, business doesn't have a conscience, does it?
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