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The department of public enterprises (DPE) is initiating measures to declare 92 former directors of state-owned enterprises (SOEs) delinquent due to their alleged involvement in state capture.
This as Public Enterprises Minister Pravin Gordhan lamented the slow pace of the country's law enforcement agencies in prosecuting the culprits of state capture and corruption during the presidency of former president Jacob Zuma.
Gordhan and officials from the DPE on Thursday appeared before Parliament’s Select Committee on Public Enterprises and Communication to brief parliamentarians on progress made regarding the implementation of the recommendations made by the commission of inquiry into allegations of state capture, which was chaired by Chief Justice Raymond Zondo.
READ: State Capture Commission: Five years on, a smidge of accountability, but little to prevent a repeat
The Zondo commission, as it is popularly known, recommended that delinquency proceedings be instituted against board members implicated in state capture who had breached their fiduciary duties under Section 162 of the Companies Act.
The DPE’s deputy director-general for state-owned companies’ governance assurance and performance, Advocate Melanchton Makobe, presented the department’s implementation plan based on the recommendations contained in the Zondo Commission’s report.
Makobe said the department was pursuing 35 cases of delinquency proceedings against 92 former directors of SOEs. He said Eskom had 13 cases, Transnet and SA Airways both had 25 cases, while Denel had 10 cases and Alexkor 22.
Makobe stated:
“Once the CIPC concludes the investigation, then they will approach the courts because this is a process that needs to be taken to court and the court must make that declaration of directors as delinquent directors.”
READ: Parliament ignores Zondo commission’s advice on state capture controls
Civil and criminal proceedings
Makobe said the DPE, working together with the country’s law enforcement agencies, was also ensuring that civil and criminal proceedings were referred to the relevant authorities for investigation, with the view to prosecute where necessary.
The other measures being taken by the department to implement the recommendations of the Zondo Commission included creating a database of officials who are implicated in state capture to ensure that they don’t get employed by other government entities and departments.
“But also, we have been referring some of these directors to their various professional bodies, especially where the individuals have failed to exercise their fiduciary responsibility,” Makobe said.
He added:
Reforms introduced at SOEs
The DPE has further introduced reforms to enhance measures meant to ensure the maintenance of good governance in SOEs, Makobe said.
“We have drafted and published the National State Enterprises Bill for public comment and that bill really deals with the issue of good governance within the state-owned companies,” he said.
Meanwhile, Gordhan said reversing the negative effects of state capture and large-scale corruption took time and was not as easy as replacing a board or management of an SOE with new people.
He explained:
Gordhan said it was important for the parastatals that felt the full brunt of state capture - like Eskom and Transnet - to recover and function optimally as they had a major impact on the country’s economy.
READ: 'Cadre deployment is illegal' – Zondo
The minister highlighted the energy crisis facing the country and the logistical challenges at Transnet that had posed a serious threat to the local economy.
He said:
Gordhan said the measures that the DPE outlined on getting back the country’s SOEs on the road to recovery didn't only fall within the powers and scoop of the department. He said law enforcement agencies also had a role to play when it came to investigations and prosecutions.
Gordhan said he believed law enforcement agencies, such as the Hawks and the National Prosecuting Authority, were not doing enough to bring the culprits of state capture to book.
He stated:
“And so, mischief, if you like, is encouraged because at the moment, our law enforcement entities are not making, in my view, the kind of impact and progress that they need to be making to mark their presence and their ability to be able to act against corruption and fraudulent behaviour, whether it's in the past or its operating currently.”
