FORMER journalist and Independent Senator Sunity Maharaj says constitutional reform is the beginning of a means to begin to anchor a culture of...
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The JSE has issued Eskom Holdings with a public censure and a fine of R3 million, suspended for three years, because the electricity utility has for four years repeatedly failed to disclose its policies and treatment of prominent persons and loans, and procurement to related parties.Eskom was one of the key state institutions gutted with corruption and fraud during South Africa’s so-called state capture era, and the repeated failure of appropriate disclosure to the JSE, where the utility trades its debt instruments, appears at odds with its claim that it is attempting to combat corruption within the organisation.The JSE said on Friday that Eskom had an obligation to comply with the JSE Debt Listings Requirements.In 2020, the JSE implemented rules for state-owned entities and municipalities, including that an issuer is required to have in place and publish a policy on the disclosure and treatment of domestic prominent influential persons who are board members and prescribed officers, in respect of any dealings by the issuer with domestic prominent influential persons, together with a register of these dealings.The issuer also had to have a policy and register on the disclosure and treatment of loans and procurement with any related party, domestic prominent influential persons and prescribed officers.“Eskom failed to comply with the provisions of the Debt Listings Requirements after its promulgation in 2020,” the JSE said.Eskom had applied in September 2021 for an extension to finalise the policies and registers and the JSE had granted this to February 28, 2022. Eskom failed to abide by its own terms of its extension and submitted a further extension request until July 31, 2023. By then Eskom had also not fulfilled its commitment to publish the policies and registers.The JSE said that without transparent disclosure of how these individuals were treated and involved in the issuer's affairs, there was a risk of conflicts of interest that could undermine investor confidence. Similarly, disclosing loans and procurement involving related parties “is crucial”.Eskom said in response to the JSE censure and fine that it acknowledged that it had not been “fully compliant” with the requirement to publish the policies and registers as required.Eskom said that in terms of its Memorandum of Incorporation (MOI), it was not permitted to advance loans to directors or prescribed officers and no such transactions had taken place.in terms of its Conflict of Interest Policy, which had been on Eskom's website since July 18, 2019.“Eskom is restricted from doing any business and entering into any form of procurement contracts or transactions, with any directors, prescribed officers and any employees of Eskom. Accordingly, no such transactions have taken place or would have needed to have been recorded in a register,” it said.Further, it had not, during the period in review, received any inquiries from noteholders/stakeholders or any other market participant as to the policies and registers.While Eskom had accessed the market through its Note Programme on very limited occasions, “no noteholders have been prejudiced by Eskom’s failure to publish the policies and registers”.It said that from an information transparency standpoint, there would likely be minimal and immaterial anticipated consequences for applying these policies retrospectively.Kevin Mileham, National Assembly portfolio committee member on Electricity and Energy and a DA party member, said although he was not aware of the JSE censure, it was necessary for the new government, through Parliament, to exercise better oversight of Eskom, and to see, also through the Auditor General's office, that Eskom was complying with all financial regulations, such as that required by the JSE.Mileham said it was also necessary to "do a deep dive" into Eskom's financial state of affairs, as the JSE had raised a "red flag" regarding the utlity's possible dealings with "prominent people."BUSINESS REPORT
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