Lax accounting and corporate standards

THE announcement of the resignation of Eskom CEO Brian Molefe is well timed, appropriate and speaks the right tone in terms of corporate governance and responsibilities.

However of greater concern is how were loans or advancements made to Gupta-owned enterprises totalling R1.1 billion with no guarantees whatsoever?

What if the mines went insolvent, or burnt down, or went on a non-stop strike the next day?

How would the funds have been recovered?

But here is the billion-rand question.

How can a corporate enterprise that borrows money on local and international markets taking both interest and currency risks offer an interest-free advancement (even worse than a loan) to a potential supplier?

Which business school advocates this model?

This is another shocking example of lax accounting and corporate standards and will no doubt raise a red flag in many circles regarding SA’s government and quality of state-owned enterprises.

The entire Eskom board of directors and chief finance officer need to explain how such interest-free advancements were made and why.

MUHAMMAD OMAR

Durban North