DA objects to Frame bailout

Cape Town - The new Democratic Alliance spokesperson on trade and industry, Kobus Marais, has objected to proposals to bail out Frame Textiles, a major arm of the troubled textile and clothing firm Seardel.

Marais said on Wednesday that his party fully supports efforts by government to save jobs, but only if this is done in an even-handed and sustainable manner.

"The proposed government bailout package to a private textile company, Frame, not only sets a potentially dangerous precedent, but also poses a serious conflict of interest," Marais said, "given that the plan is being driven by the new Economic Development Minister Ebrahim Patel, who has strong ties to the South African Clothing and Textiles Workers' Union (Sactwu)."

He called for a coherent, consistent and transparent policy on the criteria that will be used to award bailouts to struggling companies. "It will be financially unsustainable to simply to allocate bailouts on an ad hoc basis," he insisted, warning that if the government goes ahead with its plan, a precedent will be set where other private sector companies will knock on the government's door for similar assistance

"Assisting Frame would also create the justifiable impression that the government is favouring certain companies over others due to past ties," Marais said. "In this case the Minister of Economic Development, Mr Ebrahim Patel, was the general secretary of Sactwu a year ago and therefore has strong ties to the unions representing workers in the textile industry. This obvious conflict of interest suggests that he is giving favours to his old comrades, wielding the influence he now has in government."

- I-Net Bridge