As a second asset management company in 24 hours opted to stop lending to state-owned entities, fears grew yesterday that the moves could trigger a domino effect that would have a detrimental effect on the economy.
At the same time, a senior ANC member said the coming days and weeks would not only decide the fate of the government but also the ruling party.
The warning comes as Denmark’s Jyske Bank became the second money manager following Future growth and say it would not lend to Eskom.
On Wednesday, SA’s biggest specialist fixed income manager, Future growth, said it had shelved plans to lend more than R1.8-billion to three state companies amid concern about their governance.
It is an arm of Old Mutual. And yesterday, senior Silkeborg executive Rune Hejrskov said. “We pulled the plug on Eskom too. “I could easily see more lenders follow suit.
We see issues on lending going forward and more governance issues.” He saw “no other way” because of the d i s c o rd between President Jacob Zuma and Finance Minister Pravin Gordhan.
Hejrskov was also concerned about the “Gupta family having a much larger influence than previously expected”. Also yesterday, another group of investment specialists said uncertainties about state-owned enterprises (SOEs) could also impact.
Allan Gray chief investment officer Andrew Lapping said: “We hope the current uncertainties and governance concerns will soon be resolved as this will likely impact our views on the attractiveness of SOE debt as an investment for our clients.”
SOEs such as Eskom and SAA yesterday downplayed the loans issue, but economists called for urgent government intervention to prevent a possible ratings downgrade in December.
Political economist Daniel Silke said the move “represents further erosion in confidence in corporate governance in the SOE sector and an erosion of confidence in relation to rising political risk in the country”.
Economist Azar Jammine said the loans decisions were a clear revolt by the private sector against perceived state capture by people close to Zuma.
In parliament, Public Enterprises Minister Lynne Brown called on current and potential future investors to directly engage with her and the state-owned companies about investments.
Adding more pressure on the ANC, disgruntled members of the party have revealed their plans to force the resignation of Zuma and the entire ANC national executive committee .
The grouping plans a mass demonstration at Luthuli House next week.