Shame corporates who colluded with state capture - Gordhan

Published Aug 15, 2018


PARLIAMENT - Parliament should lead a campaign to shame big firms who were collusive in the state capture scandal to pay back money siphoned off South Africa's parastatals, Public Enterprises Minister Pravin Gordhan said on Wednesday.

"Civil cases take a long time. What about moral suasion?" Gordhan asked during a briefing to Parliament's portfolio committee on public enterprises on progress in rehabilitating companies left in financial dire straits by corruption.

He said privately executives from firms that were complicit in irregular deals or covering these up through unscrupulous auditing confided to him that they were "excruciating" about what had transpired.

"Well, excruciating is one thing, paying back the money lost to South Africa is another," the minister said.

He suggested that the legislature was well-placed to make a call to the entities involved to "get them to pay back the money".

Gordhan noted that international consultancy McKinsey had refunded R902 million paid to it by Eskom without a proper contract, but lamented that at this point there was no progress in recuperating large sums paid by the power utility to its local development partners, the Gupta-related Regiments Capital and Trillian.

He said as government implemented corrective measures at state-owned entities, more irregular spending was coming to light that was not reflected in auditing processes for a number of years and this raised questions about the conduct of auditors at the time the state capture phenomenon was in full swing.

"Why have they not been reporting some of the things we see today?"

He noted that Eskom's irregular expenditure had jumped from around R3 billion to R19.6 billion in the last financial year and said it was not the only state-owned company where irregularities have come to light since the government rotated boards.

"There is a pattern here that you will see with many entities as new boards are put in place and audit performances are being questioned," he said, adding that it must be explained why they had proven unable to detect corruption.

Gordhan last year, before he returned to government as part of the Ramaphosa administration, termed international auditing firm KPMG's local operations a "willing partner in state capture".

- African News Agency (ANA)

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