Johannesburg - Eskom chief executive Brian Molefe on Friday said that Futuregrowth Asset Management had ample time to raise its concerns about the governance of state-owned enterprises (SOEs) and described the fund manager’s concerns as “frivolous”.
Speaking on the sidelines of a Brics Business Council breakfast in Johannesburg, Molefe said if Futuregrowth had genuine concerns about Eskom it could have sold the power utility’s bonds, “instead of casting aspersions on government-guaranteed bonds (and that) means they are casting aspersions on the sovereign”.
Futuregrowth, Africa’s biggest private fixed income money manager with about R170 billion of assets, last month announced its decision to suspend new loans and roll-overs of existing debt, citing concerns about governance and oversight.
It questioned the timing and “intent” of the government’s announcement that President Jacob Zuma would chair a new body overseeing SOEs.
The asset management industry is an important source of funding for the country’s SOEs such as Eskom, Transnet, the South African National Roads Agency Limited (Sanral), the Land Bank and the Development Bank of Southern Africa.
Road show
Molefe said Futuregrowth had “ample time” to raise their concerns.
He said Eskom had embarked on a road show two weeks before Futuregrowth made “outlandish” remarks about SOEs.
“We discussed a lot of issues (at the road shows), including governance,” Molefe said.
He said none of the other fund managers had raised similar views. “Not even (Futuregrowth’s parent company) Old Mutual supports their ideas. But when he first made the announcement, (Futuregrowth chief investment officer) Andrew Canter said he would talk to the other fund managers,” he said.
Canter earlier this month denied that the company wanted other fund managers to join its decision to halt loans to SOEs.
“Each investor must do their own analysis, questioning and assessment of the SOEs’ governance independently, and there has not been any asset management industry co-operation,” Canter said, in response to Business Report questions earlier this month.
Meanwhile, speaking in his capacity as the chairman of the Brics Business Council, Molefe said the New Development Bank (NDB), formerly referred to as the Brics Development Bank would enable the Brics member countries - Brazil, Russia, India, China and South Africa - to achieve development goals.
Aligned
Molefe said the bank was aligned to the different Brics member countries’ development plans. In South Africa’s case, it was the National Development Plan, the country’s long-term plan to eliminate poverty and reduce inequality by 2030.
“Our goal in South Africa is to bring tangible projects into fruition more quickly,” Molefe said.
“Our aim is to leverage technology innovations to connect local businesses to the Brics economies and to use various learning and sharing opportunities to address some of the challenges faced by businesses and governments in different countries,” Molefe said.
He said Brics had established a regime to promote economic relations and investment among the five Brics members.
The Business Council on Friday launched a web-based trade and investment portal to promote trade and investment within the Brics.
The portal will enable individuals, businesses and governments within the Brics trade bloc to interact, pursue market opportunities and build synergies based on their respective competitive strengths.
“Our aim is to leverage technology innovations to connect local businesses to the Brics economies and to use various learning and sharing opportunities to address some of the challenges faced by businesses and governments in different countries.
“The portal is designed to offer valuable insights on trade and industry with entities in the Brics countries,” Molefe said.
BUSINESS REPORT