Minister to engage Futuregrowth over Eskom and Transnet funding withdrawal
Minister of Public Enterprises Lynne Brown will on Thursday meet with the Chief Executive of Futuregrowth Asset Management to discuss its decision to withdraw its future investments into Eskom and Transnet.
Minister Brown said her department and the State-Owned Companies (SOCs) have reflected on the decision of Futuregrowth Asset Management.
According to the department, Futuregrowth Asset Management has direct exposure of about R10 billion in Eskom and Transnet, while both have collectively raised over R470 billion from other financial institutions.
“The Futuregrowth Asset Management investment is indeed important, however, as Shareholder Representative on behalf of government and the South African State, the announced decision of Futuregrowth Asset Management was made without consulting government, myself as the Executive Authority and Shareholder Representative of Eskom and Transnet, including both these SOCs,” Minister Brown said.
She said annually her department receives four quarterly reports and an annual integrated report that includes an unqualified and clean audited annual financial statement for the financial years.
“These reports comply with the Public Finance Management Act, the Companies Act, the King III Report, the Memorandum of Incorporation, the Shareholders Compact, the Strategic Statement of intent and the established legislation of these two entities.
“All these reports demonstrate good economic and financial governance, prudent strategic and operational management, and having in place appropriate institutional structures,” Minister Brown said.
She said capital markets and multilateral institutions continue to show confidence in Eskom and Transnet’s corporate, economic and financial governance systems, their investment decisions, as well as the companies long term viability and sustainability.
“Both Eskom and Transnet have not defaulted payment of loans and other on credit facilities. The rigour and robustness of the businesses plans of these companies have seen funds being approved from AAA rated multilateral institutions such as the African Development Bank and international funding institution, like the BRICS Bank,” Minister Brown said.
She further noted Old Mutual’s statement that the announcement and decision of Futuregrowth Asset Management did not represent the views of the company.
“We take note of the fact that Old Mutual has distanced itself from its subsidiary and the potential implications to our domestic financial markets and future investments into SOCs,” Minister Brown said.
She will also meet with the CEO of Old Mutual on Thursday.
“Government is committed to engaging all affected parties as well as improving channels of communication to avoid these unfortunate actions,” Minister Brown said.
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