Cape Town – The public sector’s dependence and focus on the use of just a few professional entities underlies the problems unearthed in relation to companies like KPMG and SAP, Deputy Finance Minister Sfiso Buthelezi said on Friday.
He would rather see the South African public sector use a diversity of companies for professional services.
His comments come after German software giant SAP said on Thursday that it had reported its Gupta-linked accounts to US authorities for further investigation.
SAP submitted the evidence to US law enforcement authorities earlier this week of alleged kickbacks paid to the Gupta-linked companies by the software giant, mainly to secure valuable contracts with Eskom and Transnet.
“When SAP decided to come clean about its wrongdoing, why did it decide to go to US authorities to confess its wrongs, rather than coming to the local SA authorities?” he asked at in his keynote address at the African Infrastructure Dialogue 2017 hosted by Harith and Business Day.
It baffled Buthelezi that SAP decided on this route, when the wrongdoing was actually committed in SA.
He said he is still waiting to see what will happen, and if SAP will also approach the SA authorities and “confess”.
On Thursday SAP admitted it had not disclosed the evidence to the South African authorities, and was still deciding on the best way to approach the relevant powers.
The Hawks, also told Fin24 that SAP is "on their radar".
SAP's investigation into the red-flagged commissions was sparked by an amaBhungane report that found SAP paid a 10% “sales commission” to a company controlled by the Guptas to clinch business from Transnet . Evidence found by the investigative unit showed that Gupta-linked CAD House was deliberately interposed to obscure Gupta involvement and launder the proceeds to them.
Why are black asset managers sidelined?
Buthelezi was also bothered by the small amounts that have been placed with black asset managers, especially young ones and women. He wants this challenged.
This view was echoed by Daniel Matjila, CEO of the Public Investment Corporation (PIC).
“Big funds out there should use black managers as well – use a certain percentage of black asset managers to change the industry,” said Matjila.
“The asset management space is about capital allocation. It offers the opportunity to try and increase investment in infrastructure. The regulator should try to increase more investment in infrastructure.”
He is happy with the PIC’s partner the Government Employees Pension Fund (GEPF) allocating on development and investment, especially in infrastructure and even in SMEs.
“You have to be there at the table on the boards, being part of the decision making. That is the only way you can succeed. We learnt quickly – we don’t like taking small positions,” said Matjila.
“We need to prioritise education and especially student accommodation.”
Lastly, Matjila said poor public sector governance has seen a great deal of money lost and it is now high time to fix stte-owned entities so that they can start contributing to the economy.
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