Of R4.8 billion lost through state capture, R2.1 billion has been recovered

The rot within SOCs is deep but can be overcome says Public Enterprise Minister Pravin Gordhan.

According to Public Enterprises Minister Pravin Gordhan, the state has recovered more than R2.1 billion of the over R4.8 billion lost through contracts awarded irregularly to entities doing business with state-owned enterprises (SOEs). 

This was said in a written response to IFP member of parliament Elphas Buthelezi, who had asked about the interventions in place to recover the monies lost at state-owned companies (SOCs) within the public enterprise portfolio through state capture,

Gordhan said:

“The rot within SOCs is deep but can be overcome.” 

In his reply, Gordhan said that Eskom has recovered R902 million from McKinsey and R600 million from Trillian. The Special Investigating Unit has also filed a court application on behalf of Eskom to set aside the Tegeta Brakfontein coal supply agreement to the value of R2.7 billion. And China South Rail has paid back R618 million to Transnet

“Civil claims have been lodged against former executives to recover losses that were incurred as a result of their irregular conduct,” Gordhan said. 

To prevent events like the state capture from happening again in the future, Gordhan said that current SOC leaders have a plan to root out corruption and that each board, supported by other officials, is heavily seized with executing the plan. He added that the plans are beginning to yield “tangible results”. 

Gordhan continued:

“However, to be frank, overcoming the full impact of state capture and corruption requires vigorous effort and courage from boards and management.” 

He explained that SOCs within his department’s portfolio are facing financial difficulties and that the turnaround process is ongoing. Some SOCs will partner with strategic equity partners to improve some operations. 

"In that vein, SOCs will provide the minister with proposals on areas where private partnership are required," Gordhan concluded.