PIC wants ‘aggressive intervention’ in SOEs
THE PUBLIC Investment Corporation (PIC) said yesterday that it wants to play a more prominent role in the governance of state-owned entities (SOEs) as a condition for further backing from its funds.
PIC chief executive Dan Matjila said investing money in state-owned entities such as Eskom would involve strict conditions.
He said, from now on, it would not be business as usual.
“Going forward we have to change course because we have realised the systematic risk nature of Eskom and it is a given that the economy cannot afford this asset to fail.
“We need to intervene more aggressively in SOEs because the government guarantees are not helping us in times when government finances are also under pressure,” Matjila said.
“We now need to up the game and see how we play a bigger role in fixing the governance of Eskom and other SOEs. We are in the process of finalising a document on how we are going to invest in SOEs going forward.”
The government has in recent years extended bailouts to Eskom to keep the power utility afloat.
In 2015, the government sold its 13.9 percent stake in Vodacom to the PIC for an undisclosed sum to fund its R23bn allocation to Eskom. The PIC is wholly owned by the government and acts as investment manager for the Government Employees Pension Fund (GEPF), the Unemployment Insurance Fund (UIF) and the Compensation Commission with nearly R2 trillion in assets.
In March last year, the GEPF increased its ownership of Eskom debt through the additional purchase of R8.3 billion of Eskom bonds. At the end of the same period, the GEPF held R73.7bn of bonds and bills in the embattled state-owned utility, making it the largest single owner of Eskom debt by a long way.