The Industrial Development Corporation (IDC) has agreed to disclose publicly, the politically connected people who have received loans from the company so it can secure funding from Futuregrowth Asset Management, which cut off cash to the development finance institution in August.
This comes after the release of the explosive state capture report which had notable political individuals being implicated, including Pres. Zuma.
The IDC said it would publish the quantum and performance of all deals concluded with these people in its annual report and website.
The IDC spokesman Mandla Mpangase said it was the first time the institution would be reporting on lending to politically exposed persons (PEPs).
“We are in the process of structuring a report as requested by the board,” he said.
“However, in terms of transaction approval, a robust process is followed in line with the IDC PEP policy,” he added.
Futuregrowth has laid bare its concern about IDC’s governance and lending practices after Cabinet decided to establish a co-coordinating council for state-owned companies overseen by President Jacob Zuma.
The financial institution, which is also a subsidiary of Old Mutual financial services group also raised its concern over the contracts awarded to PEPs at parastatals and froze funding to six state-owned companies. It has now lifted the funding ban on the IDC and the Land Bank.
IDC highest-profile loan to politically connected people was its R250m loan to Shiva Uranium, owned by the Gupta family, who are Zuma’s close allies.
“The IDC regulations published in terms of the IDC Act permit the IDC directors to access funding through the IDC,” said Mpangase.
“These transactions have been reported in our integrated report and are few and far [between].”
The loan was originally repayable by 2013 with interest, but Shiva was unable to pay by the deadline and the IDC restructured the loan.
Industrial Development Corporation CEO Geoffrey Qhena told Parliament in May that the original loan was expected to be fully repaid by March 2018, while interest of R257m — accumulated between April 2010 to May 2014 – was converted into shares when Shiva’s parent company Oakbay Resources & Energy was listed on the JSE in 2014.