Gordhan to hold SOEs on short leash once they recover from state capture

Gordhan to hold SOEs on short leash once they recover from state capture

- Minister of Public Enterprises Pravin Gordhan said his department would hold state-owned enterprises (SOEs) on a much shorter leash once they recover from state capture

- Under the plan, SOEs would have to report to the department every fortnight instead of quarterly

- Gordhan said his department would change the way in which boards were appointed and how much power these boards had over procurement matters

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Public Enterprises Minister Pravin Gordhan has revealed his department’s plans to get tough on state-owned enterprises (SOEs) once they have largely recovered from the phenomenon of state capture.

Gordhan told Parliament on Wednesday that SOEs would have to report on key performance areas and operations on a fortnightly basis instead of the current quarterly report.

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The minister said his department was looking into the legality of introducing a shareholder-step-in clause, which would allow his department to intervene in matters where it became clear that a particular board was shown to lack capacity to function in the best interests of the company.

Briefly.co.za gathered that these plans form part of Gordhan’s broader mandate to review the business practices, funding models and government’s power to intervene when these entities fail.

During the State of the Nation Address (SONA) in February, President Ramaphosa promised a wholesale review of how SOEs functioned.

Gordhan admitted on Wednesday that most SOEs which report to his department had been affected by state capture. Gordhan added that his department would change the way in which boards were appointed to SOE’s.

The minister said his department was looking at limiting the power of board members in the procurement process and allowing the Auditor-General to assess and review financial statements and forensic reports into procurement matters.

"You have the manifestations in people, structures and culture of the state capture phenomenon and in that context the president specifically mentioned state-owned enterprises, saying they faced governance, operational and financial challenges," he said.

Gordhan said his department had already started reviewing all boards and senior management at SOEs to ascertain the exact extent to which officials are involved in state capture.

"We will have to look at already adopted policy and how it views private sector involvement in the undertaking of assisting entities. But, in the first instance, we must get governance and management fixed before we entertain other ideas," he said.

Gordhan said the current monitoring and overseeing of SEOs was far below the level where he wanted it to be. He said all SOEs had been informed of the proposed reforms.

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Source: Briefly.co.za

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