Gordhan bemoans the rot in SOEs

Pravin Gordhan Image Credit Ground Up / Ashraf HendricksPravin Gordhan Image Credit Ground Up / Ashraf Hendricks

Public Enterprises Minister Pravin Gordhan has laid out the dire state of the parastatals, in a brutally frank speech to MPs, and has promised to seek out and punish the crooks.

He was addressing Parliament in Cape Town on his department’s budget vote.  In contrast to the more pedestrian speeches of many other Ministers,  Gordhan did not pull his punches in vowing to root out state capture and other forms of corruption in the SOEs.

“The first step in bringing stability to all our state owned enterprises has been to ascertain and begin to address the malaise, depth of corruption and criminal behaviour that seems to have become endemic in these institutions,” he said.

Together with the Boards of each state-owned company and following due process, corrupt executives will undergo disciplinary processes and be dismissed and new management appointed and existing vacancies filled with people with proven capability and a track record of ethical behaviour.

”Government has established a Judicial Commission of Inquiry to investigate matters of public and national interest concerning allegations of state capture, corruption and fraud. We will be making a comprehensive submission to the commission. We expect that the commission will proceed expeditiously so that the stultifying effect of state capture can be dealt with decisively and uncompromisingly.”

Gordhan promised no mercy.

“A team comprising the Hawks, NPA and SIU is working with SOC Forensic Investigators, reviewing Eskom and Transnet forensic reports.

“The results of this process will be used for example, to seek that certain directors are declared delinquent, open criminal proceedings where a prima facie case of fraud and corruption exists, and where individuals must face the consequences of their actions.

“We shall not only be satisfied with putting the criminals in jail. The money they have stolen from the SOCs and the things they have bought with them – expensive houses, flashy cars, jets – must be recovered and returned.

“The SOCs will liaise closely with and provide all the support they can to the law enforcement authorities, especially the Asset Forfeiture Unit and the Special Investigation Unit, to identify, trace and locate the stolen assets and to recover these, using criminal and civil processes.

“These are funds that have been stolen. They must be returned to the fiscus. They belong to our people not to crooks.

“I am also seeking legal advice on how SOCs can best support our law enforcement authorities to identify stolen assets which have been hidden in other countries, such as in Dubai and India, so that these can be brought back.”  This was clearly a reference to the Guptas.

Gordhan said investigations by the Hawks into some issues are at an advanced stage. These include:

• The contracting for or the procurement of coal and coal transportation services;

• Maladministration concerning Medupi, Kusile and Ingula; appointment of McKinsey,

• Trillian and Regiments to render services to Eskom and Transnet;

• Defective performance by build programme service providers appointed by Eskom; and

• Unlawful appropriation or expenditure of public money or property concerning Transnet and Eskom.

“Those that have been involved in corruption must not be under the illusion that their resignation absolves them from being held to account,” he said.

Gordhan warned, too, that private sector collusjon with corruption will be punished.

He said: “We have also learnt that firms from the private sector – that we would have expected to have been reputable – have played a destructive, possibly even collusive role, in the capture process at our state-owned companies.

“In this regard, sufficient prima facie evidence exists of their role in actively facilitating malfeasance. They have brought their businesses and their entire sectors into disrepute.

“Those firms and the persons involved must be thoroughly investigated and, if criminally prosecutable, the law must take its course and the proceeds of crime be recovered.”

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