Fund managers such as Futuregrowth Asset Management and Jyske Bank AS has decided to stop extending credit to some of South Africa’s State-owned companies. Minister Gordhan says it is a “useful lesson,” for the Republic of South Africa.
South Africa must “not think that the world is not watching us in some of the things that might be happening in some” state companies, Gordhan said in a televised interview with the South African Broadcasting Corp on Friday. “Those people are not obliged to lend us money. If we do the right things, we will certainly attract more money.”
Futuregrowth, with $11.7 billion in assets, shelved plans to lend more than R1.8 billion to three South African State-owned companies including Eskom and Transnet on concerns about how they are being run. Sasfin Asset Managers and Aeon Investment Management expressed support for Futuregrowth while stopping short of saying they won’t lend to state enterprises.
“It is a very concerning development,” Gordhan said. “We as the Treasury have been warning both political figures and people running some of our institutions, ‘be careful and show the right kind of integrity, make sure that your governance is right.’”