CAPE TOWN -The South African government wants to reassure the public that the recent changes in the boards and management teams at state-owned entities were not window dressing but part of a process eventually intended to recuperate all monies stolen from the public purse, parliament heard on Wednesday.
Public Enterprises Minister Pravin Gordhan told MPs that his department wanted to know how much money had been stolen, from which entity, by what mechanism and where it has gone to.
Gordhan was briefing a joint meeting of Parliament’s public enterprises committee on the department’s plan of action to turn around state-owned companies and to root out corruption that has crippled a large number of them.
“We need that money back in South Africa, so we want to put in place a process of collaboration, both amongst our own South African entities, but if needs be, with others as well to actually recover the stolen funds from these entities,” said Gordhan.
He further said that boards would be asked to reconsider bonuses to management staff in entities plagued by irregular conduct, adding that his department would not allow a situation where senior management staff were seemingly rewarded for tolerating misconduct.
“Obviously there might be some legal and other implications, but I think seniors managers in these entities must feel some pain if they are to ensure that they use their positions in a responsible way to break the chain of fraud and corruption, as the president instructed in many of these entities.”
Gordhan, recalling that well-known accounting and advisory firms had been engaged in corrupt practices at state-owned entities, said the government should take steps to ensure that the implicated firms were no longer allowed to work with parastatals.
"We should create an environment where these firms would be prevented from doing business with state-owned entities in the future.The legalities of that would still be gone into, but it will be good to have ourselves and yourselves (MPs) in agreement on this particular issue," he said.
One of the key steps to be taken include lifestyle audits on senior employees, added Gordhan.
Weak and inexperienced boards and management, limited direction and poor oversight and leadership from board and shareholders were among the key issues highlighted by the department in its presentation to MPs.
The department said it has increased its budget from R273.9 million in 2018/19 to 312.8 million in 2020/21 at an average growth rate of 5.5% , adding that compensation of employees was a significant share of the department's budget over the medium term and this was a result of the oversight function which required specialised and highly skilled personnel.