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Money manager is tired of 'ridiculous' rules for SA bonds

Feb 27 2018 20:06
Renee Bonorchis, Bloomberg

Johannesburg - South Africa’s biggest specialist fixed-income money manager is fed up with state-owned companies’ lack of disclosure.

“There’s no obligation for the companies to report” changes to their structure or management, Andrew Canter, the chief investment officer of Cape Town-based Futuregrowth Asset Management, which manages about R177bn, said in a video posted on YouTube on February 25. “It’s just ridiculous.”

By way of example, Canter referred to governance lapses at KwaZulu-Natal's Umgeni Water which provides drinking water to about 6 million consumers.

It didn’t tell its bondholders in June last year when the entire board was fired, according to Canter. Shami Harichunder, a spokesperson for Umgeni Water, didn’t answer a call to his office phone or an emailed request for comment.

The lack of information from state-owned companies “is a classic, visibly Hollywood-style good versus evil situation”, Canter said in the video. To fix it “we need other asset managers to read what we’re writing, to listen to us, to start asking the same questions”, he said.

The company announced in 2016 it will stop buying bonds of six state-owned companies because of concerns over governance.

Last month it said it wasn’t ready to start lending again to cash-strapped Eskom.

Colin Cruywagen, a spokesperson for the Department of Public Enterprises, said he wasn’t immediately able to respond.

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