Johannesburg - Futuregrowth's parent company, Old Mutual, on Thursday distanced itself from the statements that were made by its subsidiary on state-owned companies, saying they did not represent the broader views of Old Mutual.
This follows Futuregrowth Asset Management's unprecedented decision on Wednesday to suspend additional loans and halt negotiations on over R1.8 billion of debt finance to three different state-owned companies, citing growing concerns about their governance and oversight issues.
Futuregrowth is a specialist investment company that manages around R170 billion of assets on behalf of Old Mutual investors. It funds Eskom, Transnet, SA National Roads Agency Limited, Landbank, Industrial Development Corporation and the Development Bank of SA.
Chief executive of Old Mutual Emerging Markets, Ralph Mupita, said Old Mutual believed that public-private partnerships were critical for much-needed and shared growth in South Africa, and that Old Mutual would continue to play their part in enabling that.
Mupita said Futuregrowth has a mandate to make independent investment calls on behalf of its clients, but Old Mutual was committed to existing commercial relationships and public-private partnerships. “Yesterday's comments by Futuregrowth do not represent the broader views of Old Mutual,” Mupita said in a statement.
“We respect the independence that fund managers need to deliver investment performance for clients, and believe that a more constructive model of engagement is needed and necessary to build and increase socio-economic development and drive financial inclusion in our country.”
Mupita said they would would engage the fund manager around these issues. “Old Mutual remains committed to our existing commercial relationships and public-private partnerships with SOEs and will continue playing a constructive and value-adding role in capital markets, in both listed and unlisted investments,” Mupita said.
Meanwhile, Eskom also weighed in on the scandal, saying that Futuregrowth's announcement would not place the power supplier's funding plan at risk. “As at the end of August, Eskom has available liquidity of approximately R38 billion and has secured more than 57 percent of its borrowing requirement of R69 billion for the financial year 2016/17,” Eskom's chief financial officer, Anoj Singh said in a statement.
“Consequently, the announcement by Futuregrowth Asset Managers does not place Eskom's funding plan at risk and I am confident that the funding for the year will be raised.”
Despite this, Singh said they would continue to engage with Futuregrowth and the broader investor community to understand the recent concerns raised regarding current and future investments into Eskom.
African News Agency