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Treasury backs Brown on SOE issues

Aug 31 2016 18:16
Lameez Omarjee

Johannesburg – National Treasury said it welcomes the call by Minister of Public Enterprise Lynne Brown to resolve issues surrounding state-owned enterprises (SOEs).

In an emailed response to Fin24, Treasury said that although Brown’s comments were with respect to Eskom, they support it as a “matter of principle”.

“[Treasury is] looking forward to resolving all matters inter-departmentally and report back accordingly in as far as they are matter of public interest,” the email stated.

Treasury quoted a statement by Finance Minister Pravin Gordhan, in which he said: “In the spirit of intergovernmental relations, National Treasury calls upon all state entities to practise and respect the principles contained in the chapter of the constitution on cooperative  governance.”

Treasury would not publicly comment on reports by the Sunday Times this past week that it would be taking legal action against defence technology company Denel.

In a statement released by Denel on Tuesday, the SOE criticised Gordhan and Treasury's bid to halt its joint venture with Gupta-linked VR Laser Asia.

"Such litigation will be a violation of Chapter 3 of the constitution and Denel will vigorously oppose it,” Denel stated.

Read: Denel tears into Gordhan, defends Guptas

Fin24 reported that Denel has been embroiled in controversy following claims that it did not secure a Section 54 application of the Public Finance Management Act (PFMA), which allows state-owned companies to launch partnerships and joint ventures. It was reported that Denel formed the VR Laser Asia partnership in December, without Treasury’s permission as required by the PFMA.

Denel claimed it has always followed the PFMA processes and has not transgressed any laws.

Previously, acting group financial director Odwa Mhlwana said the SOE had “closed its books” on the issue completely. Mhlwana said Denel believes its “vehicle” to access the Asian market was approved, and that following thorough analysis with its shareholders it was agreed the company was not at fault.

Also read: Denel and Treasury still at war over VR Laser deal

Mhlwana told Fin24 that if Treasury still has a problem, they can take it up with the Department of Public Enterprise.

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