State provident fund mum on nationalisation

2011-09-10 12:01

Those waiting for Africa’s largest pension fund to state its views on nationalisation will have to keep waiting.

The Government Employees Provident Fund remains neutral on the question, Arthur Moloto, the chairperson of the fund’s board of trustees told City Press this week.

Instead, the fund would follow the debate and engage with people who had completed their research and formed opinions on the subject before taking a stance on the controversial issue, said Moloto.

The provident fund, by virtue of its size and reach, had been under pressure to say what it thought about nationalisation. It controlled assets worth R912 billion across various industries.

It had R118 billion invested in mining alone and R52 billion in the banking sector. It also held 10% of stock listed on the Johannesburg Security Exchange. It had 1.2 million government employees and 320 000 pensioners on its books.

The fund was a significant BEE financier and currently had exposure of R9.1 billion on empowerment deals.

The ANC Youth League, some ANC provincial structures and some Cosatu unions called for the nationalisation of mines and land presently owned by private individuals and companies.

The youth league wanted this to happen without the present owners being compensated while other organisations were not explicit about how the process should take place.

Mining magnate and South Africa’s wealthiest man Patrice Motsepe last week ended his neutrality, pronouncing nationalisation a bad idea. Absa chief executive Maria Ramos also poured cold water on the idea.

Though Moloto admitted the fund had not conducted studies to determine its future position he said the board had mandated the cautious approach.

“The position of the board has been a clear one: be proactive and make a meaningful contribution; engage with those with those who have done studies and have formulated opinions and then come up with what we think is the right solution,” said Moloto.

He also denied that the fund was stalling because it did not want to be on the wrong side of the outcome of an ANC position once the organisation revealed the findings of its study on whether nationalisation was feasible and, if it was, which practices were best.

“We cannot be reckless about this topic. We have to be cautious. Remember the state is the guarantor of this fund. If it goes belly-up we will have to go back to the public and the minister of finance,” said Moloto.

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