Warring state-owned entities given stern warning

Warring parties in state institutions must stop their public spats as this could destabilise the economy, says Deputy President Cyril Ramaphosa. This comes as two investment firms pulled the plug on state-owned entities by stopping financial assistance because of the infighting in government. Jyske Bank, of Denmark, said yesterday it would no longer lend money to Eskom, citing governance issues. It warned that other investment firms could also follow suit. Its decision came after Futuregrowth became the first investment firm to raise serious concerns on political uncertainty in the country and interferences in parastatals by the state. It stopped lending money to six of them, including Eskom, Sanral, the Industrial Development Corporation, the Development Bank of Southern Africa and the Land Bank.

In the answering session in the National Assembly, Ramaphosa warned yesterday that the infighting could impact on the economy. Finance Minister Pravin Gordhan is caught up in a war with the government-owned companies. This followed the National Treasury’s request for information from Eskom on coal contracts with Tegeta, a Gupta-owned firm, and with Denel over a joint venture deal with another Gupta company. “The events of the past few weeks have been a concern to many South Africans, and we call for all those involved to take care that whatever they do should not lead to destabilising our economy and getting people to believe that our government is not functioning well,” said Ramaphosa. He first broke ranks last week Thursday at the funeral of former ANC minister and diplomat Makhenkesi Stofile, where he came out in support of Gordhan against the Hawks.

At the time, he warned that it was not good for the country when the government was at war with itself. In Parliament yesterday, he said this matter needed to be brought to an end. The ANC also came out against the decision by Futuregrowth to stop lending money to state-owned entities. The party said the asset management firm had acted prematurely on its ?decision. But opposition parties in Parliament were not impressed with the latest developments, and blamed ANC factions for the scramble for state resources. Ramaphosa said party leaders had put in place measures to address structural problems in the economy, and Gordhan was at the heart of these efforts to revive the economy. He said the government would like to see the companies functioning well.

The government has since last year been calling on state-owned entities to improve their financial performance and stop relying on bailouts from the government. Ramaphosa said Gordhan had been working with a number of business leaders in setting up structures in the economy.