How South African companies make bribes

A forensics expert warns that the government is not the only player when it comes to bribery and corruption in South Africa, with the private sector also having a big role to play.

Companies find ingenious ways to conceal bribes, said Steven Powell, a forensics executive at ENS, in an interview with Talk 702 radio station.

Many of these business have hidden sources of revenue, they’ve got by-product waste that they sell, or just left-over consumables from building projects. And that is easily converted into cash,” he said.

“That cash is not attractive to auditors because its not material, not high value. And that often is the basis for a slush fund, from which bribes are paid in order to win contracts, tenders and appointments.”

Powell said that where bribery crosses the line: where it becomes more than a marketing lunch, or a gift, is when it becomes high value?

He said that while the brown paper envelope analogy was often used in jest, it is often how bribery payments actually take place.

He said that quite an alarming amount of bribes are paid in cash because authoritative money holding facilities and legal institutions are all accountable and have an obligation to report suspicious transactions.

He cautioned however, that the more sophisticated companies use more subtle techniques, namely they spend money on the decision maker, “you send him for example to the Rugby World Cup, pay for all his accommodation, first class flights etc.”

The forensic expert said that bribe payments are sniffed out when they become excessive: more than R50,000, or R100,000, payments for motor cars, or for holidays overseas. “Its so far across the line that its not even debatable. Most companies have a gift policy limit,” Powell said.

He called for a more robust enforcement, stronger jail terms for offenders.

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How South African companies make bribes