Study Case:

Top South African Indian-origin businessman arrested for Gupta-linked fraud and corruption JOHANNESBURG: Iqbal Meer Sharma, once a powerful South African government official in the Department of Trade and Industry, was arrested on Thursday in a massive fraud and corruption scandal linked to the controversial Gupta family. Sharma was charged alongside three senior former officials of the Free State government, who allegedly transgressed processes related to spending of public funds. The state alleges that Sharma, through his company Nuland Investment, laundered over 20 million Rands which the provincial Free State Department of Agriculture paid for a feasibility study which was supposed to cost just 1.5 million Rands. This was to determine whether the Estina Dairy Farm project would benefit small-scale Black farmers in partnership with Indian company Paras. The Estina project failed badly, with allegations that tens of millions more from the venture were siphoned off to the Gupta family, which is accused of looting billions of Rands from a number of state and parastatal institutions. The Gupta brothers - Ajay, Atul and Rajesh - are in self-exile in Dubai as the South African government tries through the UN to extradite them because there is no extradition treaty between the two countries. Nuland then outsourced the study to two companies, which later over-charged the department with 24 million Rands. "We are alleging that, in order to siphon off money, (Sharma) subcontracted another company and the other sub-company was supposed to do the same services which [another well-known company] had already done," said Sindisiwe Seboka, spokesperson for the National Prosecuting Authority's Investigative Directorate. Community members are also angry because they feel that there has been large scale looting at the facility by government officials, said Odendaal. The local chief and community members are desperately crying out for government intervention in the project and for experts to get the project back on track. Sharma and the former Head of the Agriculture Department Peter Tabetha were remanded in custody pending a formal bail application on June 7. In 2002, Sharma, then a director in the South African Department of Trade and Industries, joined then Indian Commerce Secretary Dipak Chatterjee in Johannesburg for a three-day meeting with high-profile business leaders to revive cooperation between the two countries through the India South Africa Commercial Alliance (ISACA). "Historically, we have got strong political and cultural ties, but the economic dimension of our relationship has been given a boost by ISACA, which was set up after the then Indian Prime Minister Inder Kumar Gujral visited South Africa in 1997," Sharma said then. After rising through the ranks to various positions in state Departments, Sharma started his own business, with frequent visits to India. In 2012, Sharma hit the headlines after an incident in a Mumbai restaurant which saw popular actor Saif Ali Khan being arrested after he allegedly punched Sharma. Sharma claimed that Khan retaliated angrily after he sent several requests via restaurant staff to Khan's table, where he was dining with some fellow actors, to lower their voices and allow Sharma and his family to enjoy their meal in peace. At a press conference later for his then newest film 'Agent Vinod', Khan denied that the incident had been a publicity stunt for the film's release, admitting that he could have handled the situation better and was sorry for the way it had panned out. (Adapted: Source - https://timesofindia.indiatimes.com/nri/us-canada-news/top-south-african-indian-origin-businessmanarrested-for-gupta-linked-fraud-and-corruption/articleshow/83217574.cms)

Question 1 (25 Marks) The key question among many organisations has been pertaining to the justification of why the sudden interest in risk management. Discuss the major challenges that have been highlighted that sanction the need for a focus in risk, compliance and control structures and evaluate the challenge being presented in the case study with regards to the Estina Dairy Farm project.

Rubric:

- identify and elaborate the three challenges - identify which of the above the case study is dealing with and apply the theory to the scenario

------------------------------------------------------------------------------------------------------------------------------------------------------------ Question 2 (25 Marks) In response to the numerous corporate scandals, there have been multiple responses that have been considered. Provide a definition for organisational misconduct and through secondary research, evaluate how the implementation of the EU Green Paper principles might have prevented the Estina Dairy Farm scandal.

Rubric:

- Provide a definition of organisational misconduct - identify, elaborate, and apply the widely accepted principles of the EU Green Paper to the case study - demonstrate how the application of these principles could have prevented the scandal.

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Question 3 (25 Marks) Management functions vary by program size and type, partnership arrangement, legal arrangement amongst many others. Discuss five functions of management identified by Mallin (2015) and apply these to the Free State Department of Agriculture in the context of the Estina Dairy Farm project. Provide an evaluation if management performed these functions adequately (where necessary, make relevant assumptions).

Rubric:

- identify and elaborate the management functions.

- apply the management functions to the case study and evaluate if management carried out these functions adequately.

------------------------------------------------------------------------------------------------------------------------------------------------------------ Question 4 (25 Marks) The King Code contains both principles and recommended practices aimed at achieving governance outcomes. The King IV Code provides the 16 principles and 208 recommended practices that should assist the governing body and the organisation in attaining its 'good corporate citizen' status and governance outcomes. Deliberate on the applicability of King IV for the provincial Free State Department of Agriculture and through some research of your own, evaluate the entity's alignment with the 2nd principle of King IV.

Rubric:

- deliberate on the applicability of King IV for the provincial Free State Department of Agriculture. - identify the 2nd principle of King IV. - discuss the 5 recommended practices associated and through their research, provide an evaluation if these practices are being undertaken at the provincial Free State Department of Agriculture.