Gigaba ‘won’t risk’ state pensions
TALKS: OVER BUYING OF PART OF STAKE IN TELKOM
Finance Minister will not ask PIC for funds to bail out stateowned companies.
PIC has almost R1.9tn in assets and handles pension funds for state workers.
Finance Minister Malusi Gigaba said he won’t ask the Public Investment Corporation (PIC) to provide funds to bail out state-owned companies that will put the pensions of government workers at risk.
“There is no attempt to dip into pensions for reasons that are unscrupulous,” Gigaba said yesterday after a meeting with the PIC board. The event was scheduled after media reports said National Treasury was seeking to use PIC funds to put into struggling government entities such as South African Airways (SAA).
Treasury is in talks with the PIC about buying part of its 39% stake in Telkom and discussions are ongoing, DG Dondo Mogajane said at the same event.
Government knows that the PIC won’t take the entire stake, which is worth about R11.8 billion, he said.
Gigaba met the PIC after the Sunday Times quoted PIC CEO Daniel Matjila as saying there is a plan to remove him after he denied a request from SAA for a R6 billion loan.
Matjila disputed that report, while PIC chairman and Deputy Finance Minister Sfiso Buthelezi said the CEO had the board’s support.
Bloomberg News reported on Friday that treasury is seeking as much as R100 billion from the money manager. The finance minister reiterated a Monday statement that the ministry hadn’t asked for that amount.
The PIC has almost R1.9 trillion in assets and handles pension funds for SA state workers, including nurses and teachers.
As well as cash for SAA, the government needs funds for Eskom, PetroSA and Denel. A precedent for the PIC to help out came in 2015 when the money manager bought the state’s R25 billion stake in wireless carrier Vodacom Group to raise funds for Eskom.
The money manager has holdings equivalent to about 13% of the market value of companies that trade on the Johannesburg Stock Exchange. – Bloomberg