patth@ccnysci.UUCP (Patt Haring) (09/04/89)
HEAVY OVERSEAS INVESTMENT IN 44 COUNTRIES BY S.AFRICAN COMPANIES South African transnational corporations are investing heavily abroad, according to United Nations' data. At least 88 South African transnationals have been identified as having controlling interests in 437 companies in 44 countries.The bulk of the investments are in Brazil, the United States, Britain The data is contained in a set of papers prepared by the UN Centre on Transnational Corporations as background for the public hearings on transnational corporations in South Africa and Namibia, in Geneva from September 4-6., reports Inter Press Service. While recognising that the primary motive behind South African investments abroad may not be sanctions-busting, the report states that the phenomenon could weaken international efforts to use economic pressure to force the regime in Pretoria to end the system of apartheid. Accordingly, the report recommends that "in view of the increase of foreign direct investment" all countries should consider the example of the US and Sweden and enact "legislation to restrict investments by South African transnational corporations abroad". The Swedish legislation bans acquisition of portfolio investment in commercial enterprises while the US. Comprehensive Anti- Apartheid Act forbids new issues of stocks or bonds of South African companies in the United States. Between January1, 1984 and April 14, 1989, 277 transnational corporations, or about 40% of the total number of foreign firms there in 1984, disinvested from South Africa. Some pulled out completely while others have retained some form of non-equity link. In 1985, according to the data in the UN. Report, South African companies had foreign assets valued at R24.6 billion (nearly US$12bn). The breakdown showed R5.7bn rand in the European Community, R8.7bn in North and South America and R8.4bn in Africa. Apart from sanctions-busting, the reasons cited in the report for foreign investment by South African companies are geographical diversification, access to markets, increased exports, access to new technology and a better return of dividends. On sanctions evasion, the report notes that by acquiring subsidiaries abroad, South African companies can have access to otherwise restricted markets and goods ~rAmong the South African companies in the forefront of investments abroad are the country's leading transnationals: Anglo-American Corporation, Sanlam, Barlow Rand, Rembrandt, Liberty Life and Old Mutual. The United Kingdom is identified as one of the main host countries, accounting for South African investment valued at #2.7 billion in 1987, of which the major contributor is the Anglo American Corporation. Another major South African corporation, Federale Volksbeleggings, has a main operating company called General Mininng Union Corporation (Gencor) whose interests in the United Kingdom are held through Unilux SA (Luxembourg) which owns Gencor UK. The operations invested in by Gencor UK. include North Sea oil and gas fields, platinum marketing, mineral trading outlets and high tech companies,the report pointsout. Through Rothman's International, the Rembrandt Group has interests in such well-known products as Cartier, Dunhill and Piaget. In the United States, South African transnationals are mainly active in real estate, computers, electrical equipment, commodities as well as natural resources. Again, the pack is led by Anglo-American, where its US investments are co-ordinated through Minorco which has interests in Engelhard Industries, a prominent New Jersey-based precious metals company, among other companies. In South America, most South African activities are said to be in Brazil where Gencor and Anglo-American are involved in gold mining. The two companies reportedly have investments in almost 30 % of Brazil's annual gold production. Anglo-American has a network of 50 subsidiaries in Brazil, the reports state. Interests are held through Meadow Investments' by Anglo-American Corporation do Brasil Limited (Ambras) and Ambras' gold mining subsidiary, Marro Velho. In Africa, South African corporations have investments in several countries including Zimbabwe ,where the nickel industry is dominated by Anglo-American, Botswana where the diamond industry is controlled by De Beers, and Lesotho where De Beers, again, controls diamonds. The pattern of South African investments abroad - through investment capital, commodities trading and pyramid holding companies - raises the question whether there can be a true disinvestment of interests from South Africa. Companies are becoming so intertwined that it is difficult to determine South African ownership, the preliminary reports conclude. --- Patt Haring | UNITEX : United Nations patth@sci.ccny.cuny.edu | Information patth@ccnysci.BITNET | Transfer Exchange -=- Every child smiles in the same language. -=- -- Patt Haring | UNITEX : United Nations patth@sci.ccny.cuny.edu | Information patth@ccnysci.BITNET | Transfer Exchange -=- Every child smiles in the same language. -=-