GEPF must answer for Eskom's R5bn bailout - PSA

Cape Town – The Public Servants Association (PSA) wants the Government Employee Pension Fund (GEPF) to provide answers by February 16 2018 for the R5bn bailout for Eskom. 

Earlier this week Fin24 reported that the Public Investment Corporation (PIC) granted the power utility a short-term R5bn loan.

The loan will fund Eskom’s operations during the month of February 2018. But three other South African banks will also have to help Eskom out, according to the PIC.

The PIC said it conducted its own due diligence, after it was approached by Eskom, and obtained approval in line with its mandate and corporate governance requirements to grant the loan. The PIC said the pricing was favourable to the GEPF

However, the PSA on Friday served the GEPF with a letter of demand, calling for the details of the agreement to be provided before the deadline of February 16. The PSA was “alarmed” by the news of the bailout.

General Manager Ivan Fredericks said that there was an agreement between the PSA, other unions, the GEPF and the PIC that no pension funds would be used to bail out state-owned enterprise, before an agreement had been reached that their governance had improved “sufficiently”.

The GEPF’s Principal Executive Officer, Abel Sithole, is to provide the full terms of the agreement between the GEPF, the PIC, Eskom, the National Treasury and any other organ of state under which the bridging loan was made. The union also wants a full disclosure of the terms of the guarantee provided by the government or Treasury, it said in a statement.

The PSA also wants the names of those who concluded the agreement on behalf of the GEPF, the PIC, Eskom and Treasury. The GEPF must also provide details of the factors which were considered when the agreement was reached, and the information from Eskom’s application.

“The PSA furthermore requires disclosure of the minutes of any meeting of the board of the GEPF where the bridging loan was discussed or approved,” the statement read.

The PSA will submit a formal Promotion of Access to Information Act (PAIA) request for the information. The GEPF is yet to respond to Fin24’s request for comment.

“The PSA will not allow the reckless handling of public servants’ pension investments and will ensure that transparency prevails,” said Fredericks.

The PSA previously called the transaction “illegal”. The union is consulting with its attorneys to urgently declare the PIC board illegally constituted, after the PIC failed to meet a February 12  2018 deadline to prove its legitimacy.

“If we are able to prove the appointment of the board was illegal… it will be only right that all the decisions they took are [also] null and void,” PSA deputy general manager Tahir Moapa told Fin24.

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