Business

Zuma’s odd grab for SOEs

2016-08-28 15:00

New council will give the president direct control of SA’s parastatals

There was incredulity this week after state-owned enterprises (SOEs) were given yet another layer of oversight with the establishment of the Presidential State-Owned Enterprises Coordinating Council, headed by President Jacob Zuma.

The public enterprises ministry is currently the key oversight body for state companies.

Since December 2014, SAA has fallen under the oversight of National Treasury.

Also in December 2014, Deputy President Cyril Ramaphosa was tasked with overseeing the turnaround of SAA, Eskom and the SA Post Office.

Ramaphosa has also been chairing an interministerial committee on SOEs for the past
two years.

Former finance minister Trevor Manuel told eNCA this week that the move by the president to set up the new council was one of a number of “very strange decisions”.

“The strangest of those was announced by the minister in the presidency [Jeff Radebe] this week, that there would be a new council that would be established to oversee all SOEs.

“I don’t understand what the function of that council would be. I know that most state-owned corporations are governed by the Companies Act and many of them have their own legislation. Already it is a complex arrangement for you to have executives in a state-owned company.

"You have a board sitting above them. That’s normal for any company. Above the board you have a minister, sometimes two ministers, that must be reported to. You have Parliament in the equation. Now you place another layer on top of that. I can’t see what the
layer does.”

When asked by eNCA if it was all about “corruption and money”, Manuel responded: “Look, I would hate to suggest that, but I’m running out of ideas, in my own mind, about what actually motivates the conduct.”

Natasha Mazzone, DA spokesperson on public enterprises, said in a statement that the party would be submitting written parliamentary questions to the presidency and the minister of finance regarding the “absurd Cabinet decision to place Zuma in charge of overseeing all strategy decisions related to state-owned entities”.

The move to have Zuma oversee SOEs was designed to frustrate the process of rescuing the most mismanaged SOEs, such as SAA and Denel, and, in so doing, continue Zuma’s reign of patronage in favour of SAA chairperson Dudu Myeni and others, Mazzone said.

“This will be the last nail in the coffin for entities such as Eskom, Denel and SAA that have seen their balance sheets heavily impaired by the ANC’s cadre-related deals and gross mismanagement by Zuma-appointed executives,” Mazzone added.

In a statement this week, the presidency said: “There is nothing sinister or new about the establishment of the Presidential State-Owned Enterprises Coordinating Council.”

Speculation that there were “sinister motives” behind the establishment of the council were “baseless and false”, the presidency said.

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