Ricochet News

Old Mutual staves off retrenchment, invests another R500 million

Jan 10, 2018
Old Mutual staves off retrenchment, invests another R500 million

Economic Development Minister Ebrahim Patel says the decision by Old Mutual to hold off on retrenchments and the establishment of a R500 million fund to boost small businesses will spur investor confidence. 

The Minister’s comments follow a decision by Old Mutual to make South Africa the primary base for all of its emerging market activities and as part of the decision, to commit to a range of public interest undertakings.  

“The move ‘back home’ of one of our premier financial institutions will help to inject investor confidence in the economy and is a well-timed signal that we can grow the economy in the period ahead and unlock the country’s potential of job creation and economic inclusion,” said Minister Patel. 

The public interest commitments by Old Mutual, made in terms of the Competition Act, include undertakings not to retrench any workers as a result of the transaction and to ensure that the company achieves best-of-class empowerment status within a prescribed time.  

A move by the financial institution to establish a R500 million fund, following discussion with the Ministry, to drive the growth of small business and employment is a significant part of the company’s commitments.  

“We look forward to the new jobs that will be created in the South African economy, particularly within small businesses, by the Development Fund,” said the Minister. 

The transaction has the support of the Competition Commission in terms of the Competition Act and has been recommended to the Competition Tribunal for consideration and approval. It will thereafter be subject to shareholder approval.

– SAnews.gov.za