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Futuregrowth ready to talk with SOEs following loan suspensions

It says political infighting, questions over corporate governance’s made investment decisions difficult.

South African rand.  Picture: Christa Eybers/EWN

JOHANNESBURG - Asset management company, Futuregrowth, says it will continue to discuss the way ahead with six state owned entities (SOEs) after suspending loans to them.

The SOEs include Eskom, South African National Road Agency Limited, Transnet, the Land Bank, the Independent Development Corporation and the Development Bank and is a severe blow for confidence in the SOEs and the country.

Futuregrowth has highlighted political infighting and questions over corporate governance.

It says this has made decisions over investment very difficult.

The company's Andrew Canter says: "We realise that in a five-year view forward that it's very easy to see these things being downgraded if they're not governed independently."

Canter says recent developments have acted as an invitation to engage.

"We have already started talking to these SOEs, and others, about their governance committees, about how they make investment, lending and capital expenditure decisions."

Economists say the decision to withdraw financial support has already affected the rand and is a blow for confidence in the country.