Gordhan must show that he really is serious about turning public enterprises around by stepping in to help pensioners

16 May 2018

Last year, the FF Plus likened the Department of Public Enterprises to a school of piranhas stripping their prey’s flesh from its bones.

In the past, state capturers acted with impunity and did not go to much trouble to hide what they were busy doing. Now, however, they are running for the hills. The new Minister of Public Enterprises, Pravin Gorhan, deserves all the credit for this.

The FF Plus must still bring further examples of state capture and other problems to the Minister’s attention so that appropriate action can be taken. It concerns Transnet and Eskom as well as the pensioners affected by these two entities.

Firstly, Eskom: Given Eskom’s high levels of debt and the number of bonds that have already been issued, the Minister must ensure that the Government Employee Pension Fund (GEPF) is shielded from Eskom. At present, Eskom is a sub-investment grade entity and pensioners’ money cannot be used to bail out the electricity supplier.

Equally important is Transnet: The Gupta-linked Regiments Capital became deeply rooted in Transnet. With the help of Gupta-friend, Mr Stanley Shane, Regiments was appointed to perform tasks that Transnet could have performed itself. Mr Shane then went on to become the chairperson of the two struggling Transnet pension funds – the pensioners are presently involved in a court case of R80 billion against Transnet as a result of the looting of their pension funds. Regiments was “coincidentally” also appointed as the fund manager of the two struggling pension funds. Regiments was suddenly removed after it was caught out in an interest rate swap in conflict of interest with Transnet’s Second Defined Benefit Fund (TSDBF). The FF Plus has to warn the Minister about the following irregularities that must be investigated as it may lead to further action against the guilty Transnet directors.

The FF Plus ascertained that the appointment of Regiments was in contravention of the Preferential Procurement Policy Framework Act.

The interest rate swap with Transnet as counterparty, exposed the TSDBF to a transaction that could have wiped out the entire fund.

The FF Plus will present a report suggesting further steps to be taken to the Minister. In the interim, the party submitted the report to the corruption division of the Hawks.

The FF Plus would like to entreat the Minister to speed up the settlement of the court case between the Transnet pensioners and Transnet and the government. The Minister must also take note of the following two factors:

1. With interest, the claim does not amount to R80 billion, but to more than R100 billion.

2. The Constitutional Court found that the pensioners have a fairly good chance to win the court case.

It comes down to this: if a settlement is not reached and the state loses the case, it will result in a domino effect of downward credit ratings for all the public enterprises, including the state itself.

The FF Plus, therefore, entreats the Minister to take urgent action to protect pensioners’ interests from Eskom and Transnet.

Issued by Anton Alberts, FF Plus chairperson and parliamentary spokesperson: Public Enterprises, 16 May 2018