PIC slammed for 'reckless gambling of pension money' on Eskom
Johannesburg - The decision by the PIC to advance R5 billion to embattled Eskom has been slammed as outrageous and reckless by opposition party the Democratic Alliance.
On Monday, reports emerged that the Public Investment Corporation (PIC) had agreed to advance a R5 billion bridging facility to the power utility for one month.
PIC in a statement said it was approached by Eskom, which indicated that it was experiencing enormous liquidity constraints that were threatening its going concern status, and after carrying out its own due diligence, obtained approval in line with its mandate and corporate governance requirements.
The PIC acts as investment manager for the GEPF, the Unemployment Insurance Fund (UIF) and the Compensation Commission.
The DA's Alf Lees in a statement slammed the decision as an outrageous and reckless gamble with government employees' pension money.
"The PIC already has substantial exposure to Eskom debt and this latest injection will only increase the risk ratio of the Eskom debt it has on its loan books.
"The Government Employees Pension Fund (GEPF) is currently exposed to Eskom to the tune of approximately R 90 billion in bills and bonds.
Lees further said: "Due to this enhanced risk on pension funds, the PIC and Eskom must release the terms of agreement for this loan, the interest that will be paid and when it’s expected to be paid back.
Government cannot raid the PIC to plug the financial holes that failing State Owned Enterprises (SOEs) continue digging for themselves due to corruption and poor corporate governance."IOL