President Cyril Ramaphosa on Wednesday said that the state-owned enterprises (SOEs) now residing in his office would move back to their line departments after the Department of Public Enterprises was disbanded.
Ramaphosa said the proposed SOE holding company would not be running the SOEs as some had suggested.
“As I indicated in the Opening of Parliament Address, we are introducing legislation to establish a state-owned holding company to oversee and co-ordinate key strategic SOEs,” he said.
Ramaphosa said the co-ordination by the SOE holding company would ensure that there was a line of sight of the SOEs to ensure their monitoring in terms of functioning, their finances, operation capacities, policy frameworks and meeting their objectives.
“The legislation will assign the functions of the holding company, which will cover issues of governance, financial management, remuneration standards and similar matters.
“This is in line with global best practice and is the approach taken by many countries with SOEs.”
Ramaphosa said the holding company would look at how the boards of SOEs were appointed and remunerated.
“We have found that there are a number of SOEs that have different ways of appointing boards, yet we are the same government and we have one same shareholder.”
He said every SOE did things as they liked. “I would like to see that come to an end. We must all be pointing in the same direction.”
Ramaphosa also said there were some SOEs that had not issued financial reports for years.
“This all happens below the screen or even underground and we carry on and yet an SOE is collapsing. The holding company will help co-ordinate to have a line of sight where even Parliament will be able to see exactly what is happening at one go.”
He said that through the establishment of the SOE holding company there would be sight of the boards’ remunerations. “The SOEs have vastly different board remuneration policies. The executives are remunerated completely differently without proper processes and procedures.”
Ramaphosa reiterated that the SOE holding company would co-ordinate.
He said the Department of Planning, Monitoring and Evaluation had been assigned the responsibility of finalising the processes towards the establishment of the holding company and associated matters in the absence of the Department of Public Enterprises.
“It will establish a dedicated SOE reform unit with the appropriate expertise to oversee this work.
“The SOEs that were previously under the stewardship of the Department of Public Enterprises will report to their respective line departments in terms of policy and regulatory matters,” Ramaphosa added.
Cape Times