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SOEs becoming 'piggybanks of politicians' - Save SA

Mar 13 2017 12:28
Lameez Omarjee and Matthew Le Cordeur

Johannesburg – Save South Africa is calling for a judicial commission of inquiry into the country’s state-owned companies and agencies.

According to a statement issued by spokesperson Lawson Naidoo, “reckless leadership” and “governance failures” are driving these companies to the ground.

“We are alarmed at the growing evidence of crises in these entities, and the president’s apparent inability to either see the problems or do anything about them,” said Naidoo.

He added that Public Enterprises Minister Lynne Brown supported the inquiry proposed in the public protector’s State of Capture report.

READ: Brown wants state capture inquiry to go ahead

The report seriously implicated those in charge of Eskom, which Brown’s ministry oversees. It questioned the conduct of former Eskom CEO Brian Molefe regarding Eskom’s coal procurement contract with Optimum Coal Mine, which was bought by Gupta-owned Tegeta Resources and Energy in 2016.

Molefe's cellphone records show he was in Saxonwold on a number of occasions, suggesting he may have been having meetings with the Gupta family at their residence.

“I personally believe that there should be an inquiry,” said Brown. “It is the only way to be able to put matters on the table. It has to happen.”

"We welcome her support for the public protector’s proposed remedial action, namely an inquiry into the state capture of SOCs (state-owned companies),” said Naidoo.

“A clear pattern of political abuse, leadership failure and poor governance is emerging.”

Naidoo said that state-owned companies and agencies are national assets meant to support the state and contribute to social and economic development. “They are increasingly becoming the playgrounds and piggybanks of politicians and businesspeople who seemingly have no commitment to the national interest, no respect for Parliament, and no respect for the Constitution. Looting state resources is their only interest.”


Naidoo listed the crisis at the Social Security Agency (Sassa) as one example, which unfolded as a result of the “corrupt relationship” between Minister of Social Development Bathabile Dlamini and service provider Cash Paymaster Services (CPS), he said.

“We are deeply concerned that the narrow, self-interested approach taken by Sassa and its political principal is putting the welfare of millions of South Africans at risk.”

READ: Sassa fiasco underscores SA leadership crisis

Bloomberg reported that Treasury recommended several banks and the Post Office distribute the grants. However, Dlamini and Sassa have insisted that Net1 is the only company with the necessary capability to do so. The terms have yet to be agreed and the Treasury will have to sign off on it, because there was no public tender.


The Passenger Rail Agency (Prasa) has “lurched” from one crisis to another over the past two years, said Naidoo. “It is deeply disturbing that the agency’s former chairman, Popo Molefe, now states that the Minister [of Transport] has one agenda: to protect those involved in corruption.”

READ: Molefe: Peters fired Prasa board to protect Letsoalo


“South African Airways, for example, continues to bleed millions of rand a month because of poor leadership and governance,” said Naidoo.

Fin24 previously reported that the Organisation Undoing Tax Abuse and the SAA Pilots Association have filed a court application to have its chair Dudu Myeni declared a delinquent director over botched deals which happened under her watch.

READ: OUTA turns to court to declare SAA's Dudu Myeni 'delinquent'

Naidoo quoted Brown in saying that SAA’s sister airline, SA Express, is “in ICU” over poor leadership and governance.


Late last year there were calls for PetroSA executives to pay back the R17.3m in bonuses they received. The bonus payouts to executives took place amid large-scale retrenchments at the state-owned company to curb costs and amid financial losses that amounted to billions of rand over the past two financial years, Fin24 reported.

READ: PetroSA execs must pay back bonuses - MP

PetroSA also tried to construct a deal which cost the country billions. “The organisation is clearly in crisis,” said Naidoo.


Naidoo said the South African Broadcast Corporation (SABC) is still reeling from the “negative legacy” of former acting group CEO Hlaudi Motsoeneng. He added that the appointment of an interim board does not indicate a commitment by Communications Minister Faith Muthambi to ensure corrupt officials are dealt with.

Naidoo pointed out that the SABC, SAA, Prasa, Eskom, SASSA, PetroSA and Denel do not have chief executives.

“The political leaders of these entities have a lot to answer for - as, ultimately, does the president, who continues to keep them in office,” he said.

“There is a clear pattern of appointments to these agencies being based on patronage and favouritism,” he added. “When corruption occurs, those who attempt to blow the whistle are marginalised or fired.”

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