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Gordhan: SOEs must clear out rot before requesting bailouts

It’s being reported that R100 billion worth of funds from the PIC will be used to bailout financially strapped state-owned companies.

FILE: Former Finance Minister Pravin Gordhan. Picture: Bertram Malgas/EWN

JOHANNESBURG - Former Finance Minister Pravin Gordhan says that state-owned entities (SOE) need to clear out the "rot" before requesting bailouts to fix their financial problems.

It’s being reported that R100 billion worth of funds from the Public Investment Corporation (PIC) will be used to bailout financially strapped state-owned companies.

Gordhan says that there are other ways to deal with this.

"Finding quick and short-term answers by taking money from one entity and putting it into a state-owned entity where the board and management haven’t changed, the rot hasn’t been fully exposed and the mistakes of the past haven’t been corrected… so, the first mission is to start cleaning up."

Finance Minister Malusi Gigaba has however refuted these claims, calling them malicious.

WATCH: Gordhan in conversation with Eusebius Mckaiser

Gigaba said these reports are untrue as no formal or informal request has been sent to the PIC for such funds.

At the same time, the Democratic Alliance said Gigaba’s decision to keep Dudu Myeni at the helm of the South African Airways board is irrational.

“Her request for an R6 billion bailout from the Public Investment Corporation is another reason why she should be removed as chairperson,” the party added.

Meanwhile, on Monday, the Congress of South African Trade Unions (Cosatu) said it doesn’t believe the minister's denial of reports.

On Sunday, PIC CEO Dan Matjila reportedly confirmed that there's attempt to remove him from his post in order to access almost R2 trillion in pensions.

WATCH: Clean up state-owned entities before bailing them out

(Edited by Zamangwane Shange)

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