ANC concerned over suspended loans for SOEs
The African National Congress (ANC) on Thursday released a statement saying it has noted the decision by Futuregrowth Asset Management to suspend loans to a number of State Owned Enterprises (SOEs).
Futuregrowth has taken a decision to suspend additional loans to Eskom, Transnet, Sanral, Landbank, the Industrial Development Corporation (IDC) and the Development Bank of South Africa (DBSA).
"Futuregrowth's decision initially includes the suspension of new loans, and roll-overs of existing debt, to those particular entities," Futuregrowth said in a statement.
According to the company, the decision is driven by growing concerns about the governance and decision structures of the SOEs and will remain in place pending a review.
"We have now suspended negotiations on over R1.8bn of debt finance to three different SOEs," Futuregrowth said.
The ANC said it is concerned by the posture adopted by Futuregrowth.
"It is our hope that Futuregrowth will engage with the relevant Ministries and parastatals to discuss the concerns they have; and together find a solution in the interest of the economy and country," the ruling party said.
The ANC believes the generalisation that corporate governance challenges beset the SOEs are erroneous and unfortunate.
"Where there are challenges, these have been identified and, amongst others, interventions made to strengthen these institutions including the establishment of an Inter-Ministerial Committee (IMC) chaired by Deputy President of the Republic, Comrade Cyril Ramaphosa, to oversee their stability and reform, with specific focus on their governance frameworks. Accordingly, we believe that Futuregrowth, or other any investor, should await the outcome of these interventions before taking any preemptive stance," it said.