Nkenke Kekana has come to be known as the man who lost one of SA’s most coveted black economic empowerment (BEE) deals — the R7,5bn Vodacom transaction.
The former ANC MP became the face of BEE consortium Mowana 5 Mile (M5M), which made the final shortlist for Vodacom’s 5% BEE stake but lost out to Thebe Investments and the Royal Bafokeng after a long and bitter process.
Kekana (45) seems to have made peace with his loss and moved on. “We are happy to walk away,” he says.
There will be suggestions that he is saving face. But Kekana’s Mowana group seems to have more irons in the fire than most are aware of.
Certainly the loss of the Vodacom deal won’t deter Kekana from his ambition of establishing a wide-ranging business empire which he hopes to bring to the JSE in the not too distant future.
Away from the public eye, Mowana Investments, the consortium’s operational arm, has put together a formidable portfolio valued at more than R500m over the past few years.
Kekana started out in 1996, when he teamed up with twin brothers Benjamin and Isaac Mophatlane to launch black IT firm Business Connexion Solution. The Mophatlanes were at the time starting to make a name for themselves in the IT industry.
The business came of age through a merger in 2003 with Comparex Africa and it subsequently listed as Business Connexion (BCX). BCX is now one of the largest IT firms in SA, with 4500 employees and revenues close to the R4bn mark, and was last year the subject of a failed takeover bid by Telkom.
Kekana, the Mophatlane brothers and other partners control Galdex Holdings, which in turn owns 25,1% of BCX. Benjamin Mophatlane is BCX CEO and Kekana is a director. “I’m no stranger to the business world,” says Kekana. “I have always had an entrepreneurial spirit and deep passion for the ICT sector.”
In the 1980s Kekana enrolled for a computer programming course and subsequently completed his postgraduate diploma in telecommunication policy & regulation at Unisa. An active ANC member, he was elected an MP in 1994 and for a long time chaired the communications portfolio committee.
He left parliament in 2003 to head regulatory affairs at Telkom, leaving two years later to establish Mowana. Mowana is separate from Galdex, but the Mophatlane brothers and Kekana are partners in both groups.
“He offers good leadership,” says Mophatlane. “We look to him for guidance on a number of issues.”
Other black businessmen are also prominent investors in Mowana, as is IT analyst John Poluta. Investec holds 10%.
Mowana’s portfolio has grown substantially over the past two years and comprises mostly minority stakes in smaller companies. “We have identified niche markets and areas where we can add value,” says Kekana. “This is the way to go for BEE — we need entrepreneurs who are prepared to take the pain before reaping the rewards.”
The group’s portfolio is structured into four different focus areas: infrastructure, IT, financial services and general services. Prominent investments include 15% in recently listed construction group Stefanutti & Bressan; 23% in crane distributor SA French; 30% in telecoms firm GlobeCast; 51% in Katlego Solution, a division of Canon SA; and 12,5% in financial services group African Dawn
The wide portfolio partly explains why Kekana can walk away from the Vodacom BEE deal with little trouble.
Mophatlane stresses that M5M, in which Mowana was the driving force, didn’t throw in the towel but walked away when the deal turned out to make little financial sense. The maximum M5M could have bought in the BEE stake was just over 20% of the R7,5bn holding, valued at R1,6bn. For the 29 consortium members — which included political heavyweights like former Icasa chair Mandla Langa, former Denel CEO Victor Moche and former SABC chair Eddie Funde — it turned out to be a relatively small deal. “In the end we realised that it offered little value,” says Kekana.
But it was undoubtedly the strong political grounding of M5M that cost it the bid. The Vodacom deal became embroiled in the post-Polokwane ANC infighting with different consortia pitched against one another on political allegiances. When Vodacom opted for Thebe and the Royal Bafokeng, it chose groups seen to be free from ANC politics.
Kekana says the characterisation of Mowana was unfortunate. “We are entrepreneurs who want to make clean deals,” he says.
But Kekana is still a prominent member of the ANC’s Gauteng provincial executive committee and will undoubtedly have to do a bit more to ensure his political associations don’t become Mowana’s Achilles heel.