Mark Willcox the former chief executive of Mvelaphanda Holdings which housed his and veteran African National Congress politician Tokyo Sexwale's business interests has died.
Willcox, it is said, died at age 50 after battling ill health for a long time. Willcox was Tokyo Sexwale's right-hand man and was instrumental in the creation of Mvelaphanda Holdings, Mvelaphanda Group which was a diversified investment company and was listed on the Johannesburg Stock Exchange as well as Mvelaphanda Resources Limited which held key interests in prized mining assets namely the Booysendaal platinum project which was eventually sold to Northam Platinum and Trans Hex diamonds as well as an interest in Gold Fields Limited.
- Mark Willcox, the former chief executive of Mvelaphanda Holdings, has died.
- Willcox despite being a Caucasian was instrumental in the creation of Black Economic Empowerment in South Africa as we know it. He certainly benefitted from it.
- His death is reported to have been caused by cardiac arrest after a prolonged illness.
It seems a strange irony that Mark Willcox, a white man was instrumental in the creation of one of the most prominent black economic empowerment formations and became fabulously wealthy from the process.
Willcox was no ordinary man.
For starters, he was a millionaire by the time he was 35 from black economic transactions housed under Mvelaphanda Holdings by 2005 after having started the company with zero capital in 1998. It took only seven years after starting from scratch for Mark Willcox to make a fortune personally of ZAR 100 million and make his business partners fabulously wealthy.
In 2005 Willcox's 4.4% interest in the formerly JSE listed and now defunct Mvela Group was estimated to be worth in the region of ZAR 118 million. This was the mainstay of his wealth.
Mining MX reported that Willcox trained as a lawyer, obtaining an LLB from the University of Cape Town. After a stint in the US, he returned to South Africa, where he became involved in commercial law. While structuring a transaction in 1998 involving diamond assets near Kimberley, Willcox first met Sexwale.
Black Economic Empowerment is an emotive topic in South Africa and southern Africa. Countries on the African continent were historically colonized by largely European countries that assumed control over political and economic control over their colonies. The colonies were governed through a political system of white minority rule where the settlers as it was exercised political control and ruled over the entire population. The natives of the land had little to no say politically, let alone any right to self-determination. When the wave of nationalism began to sweep over countries in Africa, and they began to gain independence, it did not take long for the liberators of those countries to realize that political control alone counted for nothing if they did not have economic means.
Enter Black Economic Empowerment...
The government of South Africa after realizing the importance of delivering control of the means of production to the masses decided that it was imperative to legislate economic participation of the previously disadvantaged.
- Willcox was the right-hand man of Tokyo Sexwale, the ANC stalwart and one-time South African presidential aspirant.
- Mvelaphanda Holdings invested in a diverse portfolio of businesses under Mark Willcox's leadership that ranged from mines car dealerships, and business support services.
- Mvelaphanda Resources had interests in platinum, gold, and diamonds.
The phrase previously disadvantaged became a euphemism for black and other people of colour. Political control of a country it was learnt did not count for much if it was not accompanied by control of the means of control which were still largely in white minority hands. The year after South Africa became a democracy, 1995, can be best described as the year that began the first wave of Black Economic Empowerment transactions. There are three notable waves of BEE deals from 1995 to 2010.
Ernst & Young conducted research in 2005, which they published in a report and found that in 1995 the value of BEE deals conducted was ZAR 12 billion and the following year in 1996, the value of these transactions declined somewhat to ZAR. During this period, first-generation Black Economic Empowerment companies emerged that had choice assets in key economic sectors. Companies like Real Africa Holdings Limited and New Africa Investments Limited took centre stage.
However, by 2003 Ernst & Young's reports state that these first-generation Black Economic Empowerment companies were soon eclipsed by a new breed of ravenous winner take all outfits that were backed and fronted by highly connected and politically powerful individuals.
Ernst & Young's 2005 report states that 72% of BEE deals in 2003 involved companies that were seen to be the BEE trailblazers, namely African Rainbow Minerals which is Patrice Mostepe's vehicle, Mvelaphanda which Tokyo Sexwale and Mark Willcox founded Shanduka which was the investment vehicle of the current president of South Africa Cyril Ramaphosa, Safika, Kagiso and Tiso valued at a total of R30 billion with over a third of that amount attributable to a single African Rainbow Minerals transaction.
Scholars and historians of this phase of South Africa's history surmise that, the upsurge of the BEE conglomerates came as a result of white corporations' unbundling of non-key assets and that the empowerment companies used the same model and structure of acquiring shares in various companies ranging from financial services to tourism, construction, transportation, engineering, manufacturing, information technology (IT), food processing, print and electronic media, and healthcare. The success of these BEE conglomerates did not happen without criticism as it was felt that the key individuals behind them took advantage of their "struggle credentials" to enrich themselves and create 'black chip' companies at the expense of their former "comrades".
Of the companies that emerged during the second wave of Black Economic Empowerment transactions during the early 2000s few were as prominent as Mvelaphanda Holdings which the late Mark Willcox ran and African Rainbow Minerals boss Patrice Motsepe. From its formation in 1998, the companies under Willcox's leadership accumulated a very impressive portfolio of companies that ranged from business support services to car dealerships.
- Mark Willcox grew his interest in Mvelaphanda Holdings from nil when he and Sexwale started the company in 1998 to well over ZAR 100 million by 2005.
- Through his activities in the origination of Black Economic Empowerment transactions, Mark Willcox was rumoured to have netted as much as ZAR 300 million in his dealings personally.
- Mvelaphanda is a word from the South African Venda dialect which means to progress.
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At one point the Mvelaphanda Group was an associate company of Zimbabwean conglomerate Meikles Limited. A company is considered to be an associate of another company when the other company holds an interest in it of around 30%. The associate company cannot be fully considered a subsidiary of the holding company however, its accounts need to be kept or published in the books of the holding company, especially if the holding company is a publicly listed firm. The Mvelaphanda companies were at their zenith during the 2000s. Its demise coincided with the third and current wave of Black Economic Empowerment transactions.
The government seeing that trying to redress the previously disadvantaged citizens by giving them shares in largely formerly white-owned and still white-controlled companies was not sustainable, decided to make the process broader based. For a company to be considered BEE compliant, it needed to have at least 26% of its shares in the hands of formerly disadvantaged individuals, it needed to show that it had some form of black representation on its board and management and lastly it needed to show that they procure their supplies from companies that themselves have black credentials.
Mark Willcox was said to be a private individual. It was also rare for him not to be on the end of some high-flying corporate transaction or for him to not know about it. He was rarely wrong-footed. In fact, there was barely a deal he didn't consider possible such as the tie-up proposed in 2009 between Impala Platinum, then run by the late David Brown, and Mvela Resources. He was instrumental in de-listing Mvela Resources from the JSE; however, by the time it was removed from the South African share market, its focus had shifted to energy interests.
