Trust is the bedrock of any society. It enables co-operation, builds institutions and promotes trade. When trust weakens, the fabric of society shudders in response. We are experiencing a consequence of that breakdown in trust, and it is causing South Africa to shake. Evidence is mounting every day of a co-ordinated campaign to illegally access funds from the Public Investment Corporation for the purpose of supporting ailing state-owned enterprises.
The government has no right to access these funds, which belong to civil servants and not to the government. The recent attempt by sections of government to interfere with the integrity of the PIC by attempting to illegally remove the CEO is the latest chapter in the state capture project that has already done enormous damage to the country’s financial reputation and business confidence.
Business Leadership South Africa will not tolerate any flouting of procedure. The process of accessing funds for legitimate use needs to be transparent and in line with the legal prescripts. We will keep a close watch to ensure that any attempt to capture the PIC is prevented.
The government has sufficient tools to facilitate bailouts when required, so why does it need to access funds from the PIC? The concern is that the funds supposedly earmarked for a bailout will be accessed at inflated costs and there will be “leakages” and a lack of accountability for the excess funds.
There is a saying: “Once is a mistake. Twice is a pattern. Three times is a habit”. Despite the protestations of elected officials that mistakes have been made, state capture is starting to look like a dangerous habit; an addiction.
The planned raid on the PIC is a disreputable attempt to fix the government’s disastrous stewardship of SOEs on the back of workers’ hard- earned pensions. The trustees of these funds should fiercely resist any attempts to interfere in their governance and force investments that will harm its members’ interests.
Although Finance Minister Malusi Gigaba has sought to assure the public that the PIC’s funds are not under threat, many in the country, including the unions, are not convinced. Unions such as FEDUSA are considering withdrawing their portion of the R1.67 trillion Government Employees Pension Fund investment mandate from the PIC, for fear that it will be misappropriated. They have lost trust in the minister.
In a notable intervention, the Southern African Catholic Bishops’ Conference has said it is difficult to trust what the finance minister has said about the PIC because the office of the minister suffers from a “credibility deficit”. It has gone a step further and called for a review of the appointment process for the PIC board.
It is not enough to assert that no wrongdoing; Gigaba must now demonstrate without doubt that his intentions for PIC are about transparency. BLSA has made considerable efforts to engage constructively with government, but there is no room for co-operation with the project of state capture that has done such enormous damage to our SOEs and the economy.
Any further evidence that the government is seeking to access PIC funds will be destructive of the trust necessary for a constructive relationship.
The government should focus urgently on restoring these enterprises, starting with wholesale leadership reform.
We are compelled to speak out now, against the state capture that is occurring before our very eyes.
READ ORIGINAL ARTICLE HERE
Published in Sunday Times (15 October 2015)