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GRAEME WILLIAMS FOR TIME

MACOZOMA: He says he's trying to transform South Africa's boardrooms the way he helped change its government

South Africa's mining magnates and millionaires have been meeting in the imposing Rand Club in downtown Johannesburg for more than a century. The neo-Baroque building boasts the longest bar in Africa and is filled with paintings of such celebrated past members as British colonizer Cecil Rhodes as well as, of course, the ubiquitous portrait of Queen Elizabeth II. Built on the wealth of the largest goldfield in the world and the sweat of black labor, the club's membership was, until a few years ago, closed to South Africa's blacks. But these days, there's a new breed of tycoon walking the club's wood-paneled corridors and sipping whiskey in its stuffed leather chairs. A black élite has crossed over from politics and the ruling African National Congress (A.N.C.): Rand Club members over the past few years have included Cyril Ramaphosa, 52, one of South Africa's richest men, who was once touted as a possible successor to Nelson Mandela, and Tokyo Sexwale, also 52, another politician turned capitalist.

The two men — with gold-mining magnate Patrice Motsepe, 43, whose wealth South African newspapers put at more than $500 million, and banking and media tycoon Saki Macozoma, 47 — form a quartet of rich, well-connected black businessmen who symbolize South Africa's new corporate élite. Although they work separately, Macozoma, Motsepe, Ramaphosa and Sexwale have been dubbed the Fabulous Four for their growing power and wealth, and between them, they have more than a billion dollars' worth of interests in some of South Africa's largest companies, including mining heavyweights Harmony Gold and Gold Fields, life insurer Sanlam, Alexander Forbes Financial Services as well as banking giants ABSA and Standard Bank. The men are also buying playthings. Motsepe owns the Mamelodi Sundowns, one of South Africa's most successful soccer teams. Sexwale, who bought the Oude Kelder winery outside Cape Town in 2002, sponsors the national soccer league and is financing a South African entry on the A1 Grand Prix circuit. Later this year, he will appear in a South African version of reality TV show The Apprentice, in the Donald Trump role.

Just how the four have reached this rarified level, though, has become a matter of deep controversy in South Africa. Although apartheid is dead a decade and the country is ruled by blacks, whites still dominate the economy and hold most of the wealth. Comprising only 10% of the nation's 45 million people, whites (directly or through equity positions) control 69% of the companies listed on the Johannesburg Stock Exchange; 27% are in foreign hands, and just 4% are controlled by blacks. The imbalance is also pronounced among wage earners. Some 100,000 white South Africans earn more than $60,000 annually; just 5,000 blacks do. While there is some good news — according to the South African Advertising and Research Foundation, almost 300,000 blacks became middle-income earners (between $13,000 and $23,000 annually) over the past three years — there is still 40% unemployment, which largely hits the black community.

In that context, the rise of the Fab Four is a point of pride for some — and a sign of worrisome cronyism to others. The A.N.C.-led government of President Thabo Mbeki has been pushing a policy of black economic empowerment (bee), designed to put more of the economy in black hands, in part by forcing the country's largest industries to set targets for training more black workers, promoting more black managers, using more black-owned suppliers and — this is where the controversy comes in — selling ownership stakes to black capitalists. Big firms that want to do business with the state must now file a bee scorecard to prove they are promoting "previously disadvantaged individuals," including blacks, mixed-race "coloreds" and Indians. Since government spending is some $20 billion a year, or about 20% of gdp, it's a deal not many companies can afford to pass up.

A handful of prominent and well-connected black South Africans — Macozoma, Motsepe, Ramaphosa and Sexwale among them — recognized the opportunity that presented. As South Africa's biggest companies rushed to meet their bee requirements, they often turned to the same small group of black capitalists, offering to sell or grant equity stakes at favorable terms, often financed by the companies themselves, in return for connections, expertise and links to the black marketplace. Last year, for instance, Macozoma and Ramaphosa bought, respectively, 1.8% and 1.2% stakes in Standard Bank in a deal financed by the firm. Standard ceo Jacklo Maree said at the time that the men would provide "leadership ... in a rapidly transforming South African banking environment." "We're the forerunners, the role models," says Ramaphosa, who spoke to Time last week. "My wish is that black entrepreneurs should multiply bountifully. The more the merrier."

But not everyone is thrilled that the economic empowerment sought by bee is flowing to just a few people — some critics compare South Africa's new élite with Russia's oligarchs. Business analysts and unionists, black and white, question whether that is the kind of entrepreneurialism South Africa needs. "We should be building capacity and building businesses, not just buying political credibility and political access," says Reg Rumney, a director at research firm BusinessMap Foundation, who is white. "None of these guys have really built anything." Archbishop Desmond Tutu warned late last year that bee seems to benefit only a small "recycled" élite allied to the ruling A.N.C.

Still, it's an élite that has paid some dues to gain entry to the corporate world. Macozoma is a former political prisoner who became head media liaison for the A.N.C. after it was legalized by apartheid authorities in 1990. Ramaphosa is a former union worker who became A.N.C. secretary-general and played a major role in writing South Africa's constitution. (Both still sit on the A.N.C. National Executive Committee.) Sexwale, an A.N.C. military officer jailed for 13 years by the old regime for "terrorism," later became a provincial premier. (Motsepe is the lone outsider with no direct A.N.C. links, though his sister is married to an A.N.C. minister.) Businessmen with those sorts of contacts have always been valued in other countries, but in South Africa's charged environment, they have come under scrutiny. Not surprisingly, the quartet are reluctant to discuss the situation and rarely give interviews. But Macazoma and Ramaphosa agreed to speak to Time to take on their critics.

Macozoma argues that comparing the experiences of Russia and South Africa is "analytical madness." In Russia, he notes, the oligarchs snapped up state-owned assets at bargain prices; in South Africa, the new élite is making deals with private companies which are obviously profit motivated. "I find it very strange that people who profess to believe in capitalism criticize people who embrace it," Macozoma says. His work with the A.N.C. helped transform the color of South Africa's government, he says, and now he's doing the same for its boardrooms. "You need the same kind of person who was the bedrock of the A.N.C. to be the bedrock of a society that is based on a middle class. There is no way I would support a free-enterprise system that tolerates poverty. But with five or six of us spread out through the economy, that can make a difference in a very fundamental way."

As for the idea that bee has precipitated sweetheart deals, Macozoma notes that none of the new black élite "control any independent capital" that would otherwise allow them to influence corporate South Africa, and that their investments are "often at [their own] considerable financial risk." He also sees more than a touch of racism in the criticism: "It appears that white South Africans are prepared to commit class suicide in defense of the status quo. If I were a white South African, I would welcome a situation where black people join my class and take on some of my values."

Ramaphosa, who says he's let his membership of the Rand Club lapse, is also angered by the comparison to Russia's oligarchs. "That's absolute rubbish," he told Time. "None of us have been able to make headway in business riding on the coattails of government. I've been an entrepreneur from the age of 16. What could have been a business career for me was interrupted by apartheid. I started as a hawker buying and selling things. But that had to stop because there was a struggle to be prosecuted."

As for critics who claim he and other big bee players just buy things rather than build them up, Ramaphosa says they miss the point — black South Africans need to get their hands on capital or they won't be able to build anything: "First you become a financial investor to accumulate capital, because capital does not fall from the sky. Once you're accumulating capital, you begin to acquire skills and skilled people whom you can deploy in various businesses. The third stage is acquiring control of companies and beginning to be an operator, running a proper business. Part of all that would mean having capital to start your own businesses." Being an entrepreneur, he says, "doesn't just mean you have to run a business. A guy like Warren Buffett has never run a business in his life. He's the greatest and richest entrepreneur in the world. He manages money. He invests money. That's what he does."

Nonetheless, the A.N.C. has begun to rethink its bee policy. Party secretary-general Kgalema Motlanthe complained last year that "we see the same names mentioned over and again, in one deal after another," and Phumzile Mlambo-Ngcuka, the Minerals and Energy Minister, has grumbled that white-owned companies that fulfill their empowerment obligations by selling stakes to "a few bee gentlemen" are guilty of "sabotage and neglect of the transformation imperatives." South African corporations are getting the message. In February, banking and insurance group First Rand finalized a $1.2 billion empowerment deal that will put 10% of the company's shares in trusts established for black staff members as well as poor rural women and mine workers — and not one of the Fab Four is in sight. Another recent deal put a small slice of South Africa's dominant telephone company, Telkom, into the hands of a black consortium unaligned with any of the main players. This deal was criticized, though, after it was revealed that Andile Ngcaba, the government's former director general of communications, and senior A.N.C. spokesman Smuts Ngonyama would both take chunks of Telkom.

The Fab Four also sense the mood change. After a DaimlerChrysler spokesman boasted to local newspapers last year that Motsepe, Ramaphosa and Sexwale had each bought the company's new $500,000 luxury Maybach 62, Ramaphosa announced he would sue, complaining that he did not own a Maybach. "For me it's far too much of a conspicuous display of wealth in a sea of enormous poverty," he says. "For a person to be driving a [(USD)500,000] car to me is a bit gross." The German automaker quickly admitted it had been wrong and paid an undisclosed amount into a charity Ramaphosa established through his company to help improve poor schools. "It's almost like, 'Here they are, the Johnny-come-latelies,'" says Ramaphosa. "'Look at the type of cars they drive; look at the clothes they wear.'" I find it despicable. Because quite often black people who are succeeding in business are not recognized for what they are achieving, but for how different they have now become." Changing racial perceptions in South Africa would be quite an achievement. An even bigger accomplishment would be building a millions-strong black middle class in addition to creating a few new Rand Club members.