Shareholder activists have their say on the Thabi Leoka saga

Thabi Leoka.

Thabi Leoka.

Published Jan 24, 2024


The corporate world in South Africa has been sent into high alert mode following the scandal surrounding famed economist Thabi Leoka.

Leoka was accused of faking her PhD degree, which she purportedly attained from the London School of Economics (LSE).

Leoka, who served as economic adviser to President Cyril Ramaphosa, is said to have only a Master’s degree.

Since this came to light, Leoka no longer sits on the boards of major companies in the country such as MTN South Africa, Remgro and Anglo American Platinum, to name a few.

She was also removed from the Presidential Economic Advisory Council.

Chris Logan, a popular shareholder activist, told Business Report that what had transpired was very unfortunate.

Logan said: “It is quite sad what happened to Leoka. I do not know why she would say she had a PhD, because she was already well educated. People would not think any less of her if she did not have her doctorate. She is a very talented individual and now she is paying the price for the deception.”

“For companies in South Africa, they already have to comply with many legislations and after this matter has been brought to light, it seems that they will almost have to go through with a deep forensic investigative vetting process when making appointments, which is another hurdle for them,” Logan told Business Report.

Many people have been questioning how Leoka was allowed to sit on so many boards of different companies, and Logan said that this was not an uncommon practice.

Logan said: “It is not an uncommon practice for one person to sit on various boards in South Africa. There is not a huge pool of talented people willing to sit on a company’s board in the country, as it is evident that when there is a fall, it is quite sharp. Leoka should have been transparent and stated that she did not have a PhD, as there are not many talented people to sit on a board of a company in the country.”

He also said it was not surprising that the government had not picked up on her lack of qualification, as the government was short on competence and while their vetting process should be the most stringent, it is not.

“This saga shows other companies in the country, moving forward, they have to be more vigilant in making appointments as there are many people in South Africa willing to engage in fraudulent activity and this provides a heavy reputational risk to companies.”

Meanwhile, shareholder activist and former chairperson of Ascendis Health, who also served on various subcommittees, Harry Smit, told Business Report that most top companies do not vet candidates.

Smit, who has a long history of protecting the rights of minority shareholders, said: “The fact of the matter is that 70% of top companies do not vet candidates past the provisions of the Companies Act, which in essence is, ‘If a person has in the past been removed from an office of trust due to dishonesty, been declared insolvent, or criminally convicted’. Past that, the appointment hinges on a referral from someone because they can either make money from it or other board members need control on the board for certain votes and need insiders.”

“Leoka served at MTN, Netcare, Standard Bank, Anglo American Platinum, Remgro and was on the presidential advisory council. It stinks of corruption and favouritism beyond her capabilities. One person cannot hold so many positions and do their job function effectively. All those companies have more or less the same financial year ends. If you take the number of meetings you have to attend at the board and committee level, for one board, how do you sleep doing it for so many,” he further said.

“Now look past the degree scandal. She means something to someone. She was either protecting someone's interests, or if someone scratches deeper we will find the corrupt tenders and backhands. Leave the degree alone and start doing a lifestyle audit and see who she hangs out with,” Smit said.

Jonathan Goldberg, the chairperson of Global Business Solutions, emphasised the critical need for stringent qualification verification.

Goldberg said: “The recent incident at Netcare, where Leoka's appointment was based on allegedly misleading information, underscores the repercussions of unchecked qualification fraud. It’s difficult to come back from the reputational damage falsifying your qualifications brings. This serves as a stark reminder for companies, especially in high-ranking appointments, to conduct meticulous background checks and validate qualifications against the national database.

“Such proactive measures are not just legal obligations but essential for safeguarding an organisation’s reputation. As we learn from the Thabi Leoka case, prioritising transparency and honesty in these processes is crucial for fostering trust and credibility within one’s organisations.”