Brics to finance SOEs
Troubled state institutions, which last week saw private asset management companies pull their funding, will get help from the Brics bank. Reports say Brics is ready to help South Africa's state-owned enterprises get funding.The bank is a brainchild of the Brics member states - Brazil, Russia, India, China and South Africa.Brics vice-president Leslie Maasdorp said the object of the bank was to help member states. The bank already had "bankable projects in all five member-state countries".Last week asset manager Futuregrowth pulled the plug on Eskom and said it would no longer provide new loans to SOEs.The move was soon followed by Denmark's Jyske Bank.The Sunday Times reported yesterday that concerns about slow transformation at Futuregrowth led to Eskom's pension fund with-holding further investment from the fund manager.Eskom's pension and provident fund, which manages more than R130-billion for the power utility's staff and pensioners, had declined to invest in Futuregrowth's development equity fund.Eskom said it was concerned that no black Africans held senior leadership positions in the asset management company.The ANC described as "erroneous and unfortunate" the "generalisation that corporate governance challenges beset" SOEs."The ANC is concerned by the posture adopted by Futuregrowth."It is our hope that Futuregrowth will engage the relevant ministries and parastatals to discuss the concerns they have and together find a solution in the interest of the economy and country," said party spokesman Zizi Kodwa.He said the ANC was committed to ensuring that SOEs were models of good corporate governance, independence with sound technical capacity.Futuregrowth chief investment officer Andrew Canter said last week it would stop talks with three SOEs seeking more than R1.8-billion in loans."We can't defend ourselves three years from now why we made additional loans. So we felt the right thing to do was to suspend it," he said.Canter said Futuregrowth was also concerned about the cabinet saying it would form a new committee to oversee SOEs that would in turn be supervised by President Jacob Zuma.