A week ago, founder of the Young Women in Business Network (YWBN), Nthabeleng Likotsi, shared a post on LinkedIn, praising the notorious Elizabeth Holmes. Holmes is an American woman and founder of Theranos, a health technology start-up that promised the world the impossible: a machine that could run hundreds of blood tests from a single drop of blood.
Those in the medical field dismissed Holmes, rightly so, arguing that her idea was physically impossible.
But some, believing in the hype around the 19-year-old who dropped out of the prestigious Stanford University, likening her to the brilliant Steve Jobs, invested lots of money into her company which, at its peak, was valuated at a staggering $9bn (about R132bn), with Holmes herself worth $2bn – making her the “youngest self-made billionaire” and a rising Silicon Valley giant, according to publications such as Forbes and Times magazines.
But as history has constantly demonstrated, every scam has its sell-by date, and in 2018, Theranos reached its own when Holmes was charged with fraud by the US Securities and Exchange Commission.
She was forced to pay a fine and returned almost 20-million shares to the company. She was also compelled to relinquish her voting control of Theranos and subsequently barred from serving as an officer or director of a public company for 10 years.
In the same year, Holmes was indicted on nine counts of wire fraud and two counts of conspiracy to commit wire fraud for distributing blood tests with falsified results to consumers. She is currently on trial and if convicted, faces up to 20 years in federal prison, plus potentially millions of rand in restitution and fines.
Likotsi, who recently sought investors to fund the YWBN Mutual Bank that she seeks to establish, regards Holmes as a brilliant mind. That the woman’s invention was itself a fraud is lost on Likotsi.
I couldn’t understand why someone who has been entrusted with the public’s money would heap praises on Holmes – until a day later when I read on SowetanLive and discovered that the YWBN has been given 21 days to pay back investors owing to Likotsi’s non-compliance with the law. I am one of those investors, having bought shares when the scheme was opened.
I argued at the time, publicly, that even as she may be the founder, Likotsi is not a credible person and should not be the face of the mutual bank. I made this determination after seeing her in two interviews where her complete lack of understanding of some of the most basic accounting principles was exposed.
More than this, her conduct when constructively criticised by people who, like me, supported her only because we wanted to help build an institution for black people by black people, left much to be desired. She displayed extraordinary arrogance and completely disregarded anyone who so much as posed critical questions. Interestingly, Holmes did the same – going as far as to fire scientists and engineers who were telling her that her idea was impossible.
In theory, the YWBN Mutual Bank is a powerful idea whose time has come. In reality, Likotsi is banking on emotive language about black empowerment to run what has the hallmarks of a Ponzi scheme. She recognises that our country is desperate for institutions of this nature, that are built by black people.
But we must not, even in this desperation, fail to hold those to whom we have entrusted our lives and our monies, accountable. We cause more harm than good if we set the bar so low for black people that accountability and good governance become options rather than core features of our institutions.
As for YWBN – I await my refund.
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