Living the life at SOEs? Watch out… Pravin’s coming for you

Former finance minister and now public enterprises minister, Pravin Gordhan, and he could be coming for you

Public enterprises minister Pravin Gordhan has proposed lifestyle audits for executives of state-owned enterprises.

Monitoring of state companies had been “very weak”‚ Pravin Gordhan said in Parliament on Wednesday.

He briefed the public enterprises portfolio committee on the steps being taken to “recapture” and stabilise state-owned enterprises‚ including Eskom‚ Transnet and South African Airways and to return them to financial sustainability.

The first priority was to get the boards and management teams and the orientation of these companies on the right footing and this had been the focus of the past few months.

Gordhan said during the period in which state capture was rife‚ the department largely relied on quarterly reports from the companies.

“The kind of monitoring of the actual core business and finances of these state-owned companies by the department is generally weaker than it should be‚” Gordhan said.

Reliance was placed simply on quarterly reports without a lot closer understanding of the businesses and their revenue and expenditure streams and the decisions that had had an impact on their efficacy. What was needed was much closer supervision‚ Gordhan said.

The department would be demanding much more frequent reports in key areas of the business‚ so that the department could intervene more quickly where malfeasance was creeping in.

A well-equipped monitoring and risk unit would be created within the department to analyse SOEs.

Gordhan said one of the things he had discovered since his assumption of office was that the culture that had developed in state-owned enterprises was that management was independent and autonomous from the state. This weakened accountability to the boards‚ to the public‚ the department and institutions like Parliament.

It was necessary to institutionalise accountability and transparency and ensure that the findings of forensic reports were implemented‚ the minister said.

There was also a tendency towards recklessness among management‚ who relied on the state to bail out the companies when they performed poorly and ran out of money.

He noted that the management of these enterprises had been seriously compromised as a result of the appointment of compliant boards and management teams.

Gordhan said a permanent board would be appointed shortly at Denel and a serious examination would be made of the management team. Work was also under way at SA Express‚ where malfeasance had been uncovered.

Forensic auditors would be appointed to investigate the affairs of state-owned diamond company Alexkor as it appeared the Guptas were involved in its diamond marketing company as well.

Gordhan said the department would also be looking at preventing accounting and advisory firms from doing business with state-owned entities when it was found that they had been engaging in corrupt activities in one form or another.

-BusinessLIVE

Source: TMG Digital.

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