Gordhan talks tough
Arrogance and belligerence of parastatal boards come under intense fire
FINANCE Minister Pravin Gordhan hit out at some boards of state-owned companies yesterday, singling out particularly arms manufacturer Denel.
In his final comments on the budget vote debate in the National Assembly‚ Gordhan said the Treasury had in recent times spotted a tendency that when boards of state-owned companies did things they were not supposed to do “they displayed a level of arrogance and belligerence that did not befit the right kind of corporate governance”.
“The board at Denel needs to take that message to heart‚” Gordhan said.
The Treasury is in dispute with Denel over joint venture Denel Asia‚ which it established in partnership with Gupta-linked company V R Laser.
Denel went ahead with the venture without first obtaining Treasury approval‚ as required by the Public Finance Management Act.
The Treasury has not made a final decision on the matter.
Meanwhile, Deputy Finance Minister Mcebisi Jonas said a new board would have to be in place and a competent chief executive and finance chief appointed before the Treasury would consider providing struggling state-owned airline SAA with the financial support required.
The new board and executive would be tasked with implementing a turnaround strategy and undertaking the rationalisation of the government’s three airlines – SAA‚ SA Express and Mango. Jonas said that only once this package of measures had been implemented would the Treasury be able to consider the support required by SAA.
The airline has been unable to table its financial statements for 2014-15 because of auditors’ concerns.
Jonas said SAA – which is being kept afloat by a R14.4-billion guarantee from the state – needed to reduce its debt significantly.
Parliamentary finance standing committee chairman Yunus Carrim said the failure to resolve the impasse at SAA had also resulted in a delay of the annual financial statements for the 2014-15 year‚ which should have been tabled last August.
Jonas urged that the statements be tabled before the committee’s meeting with SAA on May 18.
In his speech, Gordhan also addressed questions raised by DA finance spokesman David Maynier about the cabinet’s decision to send a delegation of three cabinet ministers to hold talks with the four banks that decided to terminate their services to Gupta-owned Oakbay Investments.
Those appointed to the delegation were Gordhan himself, Labour Minister Mildred Oliphant and Mineral Resources Minister Mosebenzi Zwane.
Gordhan said legislation required banks to know their clients and to protect themselves from being misused in concealing the proceeds of financial crime.
The law criminalised money laundering‚ corruption and the financing of terrorism.
“Our financial institutions operate within a strict and transparent regulatory control,” Gordhan said.
“They may not discriminate unfairly between clients or prospective clients.
“Aggrieved clients have recourse to dispute resolution mechanisms and the courts.”
Gordhan said the global financial crisis had taught South Africa that a well-regulated and strong financial system was a key foundation of any economy.
