Parliament has also entered the fray and approved a special joint-committee meeting over the matter this week.
George said they will finalise their next move on the matter after the joint-committee meeting in which the Treasury is expected to give answers and a detailed explanation on the controversial move.
Eskom CFO Martin Buys told SABC News on Tuesday that the move by the Treasury would help Eskom avoid receiving qualified audit reports which have a negative impact on its ability to secure loans.
“Eskom’s financial statements were always qualified as the auditors said they could not place reliance on the completeness and accuracy of the opening balances of the fruitless and wasteful expenditure, so now they (auditors) will not put any qualification to Eskom’s annual financial statements,” Buys said.
Buys said as Eskom has to “quite often enter into international markets and even the local markets to secure funding, and other entities don’t report in terms of the Public Finance Management Act (PFMA), it’s always a disadvantage to Eskom”.
Buys said the move will give Eskom the opportunity to clean itself up in the three financial years that it would be exempted from disclosing in its financial statements any irregular, wasteful and fruitless expenditure.
He said this PFMA requirement has always been the main reason behind Eskom’s failure to secure a clean audit outcome.
A notice in the Government Gazette of March 31, by Godongwana, has exempted Eskom from having to disclose in its annual financial reports for three years any irregular, fruitless or wasteful expenditure, starting from the financial year that ended on March 30.
The Treasury stated that accountability would not be compromised because irregular, fruitless and wasteful expenditure would still be reported in Eskom’s integrated annual report but not in its financial statements.
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DA meets lawyers over Eskom exemption saga
Eskom says move will help embattled power utility get loans and clean up its past as parliament approves a joint committee sitting on the matter this week
Image: Trevor Samson
The DA has briefed its lawyers and plans to take legal action against the Treasury’s decision to exempt Eskom from disclosing its wasteful, irregular and fruitless expenditure.
DA spokesperson for finance Dion George told TimesLIVE on Tuesday that the party's lawyers were looking into the legal framework in preparation for a legal challenge it plans to lodge.
George said the DA was against the decision as it did not trust the intentions behind the move, which could be meant “to hide something big”.
“I spoke to our legal team this morning and it looks likely that we will go to court,” George said.
George said with corruption rife at Eskom, the DA felt government could come up with other interventions while maintaining transparency at the power utility.
He said though this was “a very complex matter” the party wants finance minister Enoch Godongwana’s decision to be set aside and declared unlawful.
Eskom welcomes exemption on annual reporting of irregular, fruitless and wasteful expenses
Parliament has also entered the fray and approved a special joint-committee meeting over the matter this week.
George said they will finalise their next move on the matter after the joint-committee meeting in which the Treasury is expected to give answers and a detailed explanation on the controversial move.
Eskom CFO Martin Buys told SABC News on Tuesday that the move by the Treasury would help Eskom avoid receiving qualified audit reports which have a negative impact on its ability to secure loans.
“Eskom’s financial statements were always qualified as the auditors said they could not place reliance on the completeness and accuracy of the opening balances of the fruitless and wasteful expenditure, so now they (auditors) will not put any qualification to Eskom’s annual financial statements,” Buys said.
Buys said as Eskom has to “quite often enter into international markets and even the local markets to secure funding, and other entities don’t report in terms of the Public Finance Management Act (PFMA), it’s always a disadvantage to Eskom”.
Buys said the move will give Eskom the opportunity to clean itself up in the three financial years that it would be exempted from disclosing in its financial statements any irregular, wasteful and fruitless expenditure.
He said this PFMA requirement has always been the main reason behind Eskom’s failure to secure a clean audit outcome.
A notice in the Government Gazette of March 31, by Godongwana, has exempted Eskom from having to disclose in its annual financial reports for three years any irregular, fruitless or wasteful expenditure, starting from the financial year that ended on March 30.
The Treasury stated that accountability would not be compromised because irregular, fruitless and wasteful expenditure would still be reported in Eskom’s integrated annual report but not in its financial statements.
TimesLIVE
Support independent journalism by subscribing to the Sunday Times. Just R20 for the first month.
READ MORE:
Transparency at Eskom is critical: Lobby groups urge review on finance exemption
Eskom exemption 'makes mockery of our beloved country': Black Business Council
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