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*Hogan: keep parastatals politics-free* *Linda Ensor, Business Day, Johannesburg, 16 April 2010*Public Enterprises Minister Barbara Hogan yesterday urged that politics be kept out of state-owned enterprises and that their CEOs be held accountable by their boards.
While her comments were aimed at the CEOs of state entities who lobbied for outside support to secure their positions, they were also an indirect swipe at her Cabinet colleagues who entered the fray of boardroom battles to support a particular person, undermining the state entities' boards.
Hogan also took a strong stand against political parties benefiting from business deals with parastatals. She endorsed the call of Finance Minister Pravin Gordhan for the African National Congress (ANC) "to do the right thing" with regard to the interest of its investment arm Chancellor House in an Eskom contract should it emerge that there was a conflict of interest.
Chancellor House took part in a R38,5bn contract to provide boilers for the Medupi power station through its shareholding in Hitachi Power Africa.
Hogan urged Parliament to introduce legislation swiftly to govern the funding of political parties, a view strongly echoed by opposition parties .
"The whole issue of political party funding needs a proper regulatory framework.
"These matters of transparency regarding political funding and the resolution of conflicts of interests, even perceived conflicts, can only be regulated in terms of the legislation envisaged in the constitution," she said. "Regarding the Hitachi deal, I associate myself with the comments (of the) finance minister that the shareholders of Chancellor House must do the right thing if there is any conflict of interest."
Hogan said it was untenable and a violation of sound corporate governance for the CEOs of state entities to think that because they had outside political support they could flout their boards. It was unacceptable for these CEOs to mount publicity campaigns to secure their positions.
Her comments were an indirect criticism of Communications Minister Siphiwe Nyanda and Justice Minister Jeff Radebe , who became embroiled in Transnet's boardroom battles and supported the attempt by Transnet Freight Rail CEO Siyabonga Gama to establish his candidature as group CEO, despite his suspension. It later emerged a company in which Nyanda had an interest benefited from a Transnet contract.
The ANC Youth League also sided with Eskom CEO Jacob Maroga in his fight against his removal, with even President Jacob Zuma becoming embroiled in the saga.
"Our response as the Department of Public Enterprises is to say this can no longer be tolerated. We cannot have CEOs feeling they are not accountable to the boards, and boards not holding CEOs accountable. We cannot have a situation where CEOs go out publicly campaigning to secure their position," Hogan said.
"We have seen how that corporate governance failure has affected the functioning of municipalities (where municipal managers see themselves as being above councils and mayors) and we have seen it now affecting the functioning of parastatals.
"Government has been very clear that it is a corporate governance failure that has to be addressed firmly and decisively."
The politicisation of CEO positions made it difficult to attract high-calibre people to fill them. "For as long as the position of CEO becomes a hotly contested matter in the public domain, candidates who are perfectly qualified and competent will not make themselves available.
"Very often very skilled people will say we would love the job but ... we are going to be thrust into the public domain, our names dragged through the mud in endless struggles. This matter has to be put to rest as it prohibits good candidates coming forward."
Hogan stressed that boards were responsible for the recruitment of CEO candidates, with the role of the minister merely being to take their proposal to the Cabinet.
"It is not the minister's prerogative to simply appoint a CEO, (who may then presume) that they are god-ordained because they are appointed by a minister, so why worry about a board."
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