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Public Enterprise Minister Pravin Gordhan says they are not going to liquidate the SAA and that business rescue professionals should turn it around. Photo by Misheck Makora
- Public Enterprise Minister Pravin Gordhan wants auditors to explain their silence on the state capture.
- Several state-owned companies obtained funds through the state capture project, which was not pointed out by the auditors.
- Gordhan says former members of the state institutions board will also be held accountable for their actions.
Auditors of state institutions that have suffered financial losses due to the state capture project should explain why they did not point to wrongdoing, Public Enterprise Minister Pravin Gordhan said.
The minister spoke during a briefing on Friday, following the release of Transnet’s annual financial results for the year ended March 31, 2020.
Transnet is one of the few state-owned companies that is profitable, and CEO Portia Derby promised that it will, in fact, soon pay dividends to the shareholder, which is the government.
However, the group received a qualified audit opinion: CFO Nonkululeko Dlamini explained that since 2018 there has been an increasing focus on reporting irregular expenses, but the auditors still do not feel that the disclosures have been completed.
Part of the problem is that the irregular expenses belong to previous years, dating back to 2011/12. Transnet is now reviewing 13,000 previous contracts for irregularities, along with other measures to improve compliance with the Public Finance Management Act.
But Gordhan wants the auditors responsible for Transnet’s books during the “embezzlement” period when funds were extracted and state institutions reused, to account for their functions. He lamented:
“Many audit firms must explain to the South African public, and indeed to their own profession, why they kept silent and did not pierce the veil of corruption from 2012 onwards at respective institutions like Transnet and Eskom.”
– Minister of Public Enterprises Pravin Gordhan
Gordhan wants an explanation as to why the auditors did not “fully, adequately and courageously” disclose the extent to which the procurement processes were “reshaped” to serve state capture and corruption.
“In this sense, accounting and auditing firms have much to account for the way in which they exercised their fiduciary duty in relation to institutions and the business sector as a whole.”
Gordhan said it is important to determine whether the audit firms were “willing or silent” to state capture.
Gordhan went on to say that former executives and board members will also be held accountable to the Zondo commission and other enforcement agencies like the Hawks.
One way would be to face criminal proceedings or recover the money through civil courts, he added.
He said the department is in talks with the auditor general and the National Treasury to fence in the state’s capture period, so that it can be addressed in its own right, without contaminating audit findings in the current environment.
