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GIVING BACK: South Africa’s richest man, Patrice Motsepe, to give away half of his $2.65 billion wealth

Patrice-Motsepe-with-his-family-members-360x225Many people were amazed when South Africa’s richest man, Patrice Motsepe, announced plans to join the Giving Pledge, an effort launched by Microsoft founder, Bill Gates and investment tycoon, Warren Buffett, to encourage the world’s wealthiest to give away part of their wealth.

But the mining magnate, said to belong to the ilk of Nigeria’s richest man, Aliko Dangote, said he would be giving out half of his wealth – a whopping net worth of $2.65bn (£1.67bn) according to Forbes – to his family philanthropic foundation.

Motsepe, who is the chairman of African Rainbow Minerals, is South Africa’s only black billionaire.

The foundation, which will benefit from Motsepe’s magnanimity, was founded in 1999 by him and his wife, Precious.

It oversees the philanthropic work done by the family. This includes education and health; the development and welfare of women, youth, workers and the disabled, churches and development of rural and urban areas, sports and music.

“I decided quite some time ago to give at least half of the funds generated by our family assets to uplift poor and other disadvantaged and marginalised South Africans, but was also duty-bound and committed to ensuring that it would be done in a way that protects the interests and retains the confidence of our shareholders and investors,” Motsepe said.

Gates and Buffett, who are always on each other’s heels for the top spot on the world’s richest list, founded the Giving Pledge in 2010 and have both committed large chunks of their sizable wealth to charitable organisations around the world.

As of November 2012, 91 billionaires – mostly Americans – have committed to the pledge.

Motsepe said, “I was also a beneficiary of various people, black and white, in South Africa and in the US who educated, trained, mentored and inspired me and whose faith and belief in me contributed to my success in my profession, business and elsewhere. The same can be said about my wife, Precious, and we are deeply indebted to them and many more.

“Most of our donations have been private, but the need and challenges are great, and we hope that our Giving Pledge will encourage others in South Africa, Africa and other emerging economies to give and make the world a better place.”

Motsepe met Buffett in the US in August 2012, and with the Gates family in Cape Town later last year. The foundation will appoint an advisory council which will consist of “church and religious leaders, traditional, disabled, women, youth and labour leaders and other respected NGO and community upliftment leaders”.

According to Forbes, Motsepe’s net worth stood at $2.65bn (£1.67bn) in November 2012. ARM, the company he founded and chairs had a market cap of R43.47 billion at the time of the give-away announcement. It isn’t clear when the donation will happen, but it is understood that it will happen in perpetuity.

Motsepe’s rise to the stop started in earnest when he became the first black partner in the law firm, Bowman Gilfillan, in 1994. As a specialist in mining and business law at a time when black economic empowerment was just starting up, he had a front-row seat to some of the biggest mining deals of the day. He soon founded a venture which gleaned gold dust from inside shafts and began to buy marginal gold mines from Anglo Gold under very favourable financing terms when the gold price dipped in 1997.

At the beginning of the 2000s, Motsepe began to found a number of companies which would constitute the ARM conglomeration. One of the most important acquisitions was the 20 per cent stake in Harmony Gold, the 12th largest gold mining company in the world with three mining operations in South Africa.

ARM’s reach now includes Zambia, Zimbabwe and Papua New Guinea. Motsepe’s personal interests expanded into football in 2003 when he bought PSL side Mamelodi Sundowns. Motsepe is named on the board of Sanlam, Absa and Harmony Gold.

He topped the Sunday Times rich list in 2012 with an estimated fortune of R20.07 billion. Despite winning many entrepreneurial awards and being hailed as a success story, Forbes noted that his wealth couldn’t just be explained by good business genius. His political connections made the difference.

“But for all the adulation, in South Africa such success comes with a price: being labelled an oligarch. Even many blacks have complained that the country’s 1994 transformation from apartheid to democracy has benefited only the elite few. The criticism stems from laws that require substantial black ownership in certain industries, including mining. A handful of politically connected individuals have grown enormously wealthy as a result,” Forbes said in a 2008 article.

The tradition which inspired Buffet and Gates to start the campaign is a rich one – at least in the United States. Steel magnate Andrew Carnegie donated $350m of his vast fortune to charity just before his death in 1919, and so did the one man whose name came to be associated with Great American Wealth – John D. Rockefeller. In fact, it was he who started the trend of targeted donations to aid medical, educational and scientific research.

 

via Punch

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