Cape Town – Finance Minister Enoch Godongwana has decided against granting Eskom a partial exemption from disclosing irregular expenditures and losses from criminal conduct in its annual financial statements.
The exemption was initially granted in March but was later withdrawn after public outcry.
“The minister recognises the commitment of the Eskom board and management to fight and expose fraud and corruption, and the additional compliance and reporting burden facing Eskom and other State-Owned Entities (SOEs).
“However, it is the view of the minister that Eskom needs to do more operationally to reduce the scope of fraud and corruption before such exemption can be considered, and for it to be effective,” Treasury said.
It added: “The commitment of the Eskom board and management to fight and expose fraud and corruption – as Eskom attempts to recover from the devastating impact of state capture, and take steps against past and current corruption – needs to ensure that its anti-corruption strategy is credible and has the support of key stakeholders like investors, lenders, suppliers, customers, and the public.”
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The Treasury said it received 56 comments from the public regarding the proposed exemption, covering various issues such as accounting, auditing, governance, and public interest.
It engaged with audit firms, professional bodies, and relevant authorities to discuss the compliance reporting challenges faced by state-owned entities like Eskom.
The Treasury acknowledged the need to differentiate between corrupt transactions and expenditures made in good faith but not in compliance with financial and non-financial laws.
The comments received will inform further engagement to develop a better compliance reporting framework for state-owned entities, said the Treasury.
Godongwana emphasised the need for operational improvements at Eskom to address fraud and corruption before considering exemptions.
He highlighted the importance of state-owned entities (SOEs) like Eskom to be self-sustaining and not rely solely on government funding.
The minister, however, pledged ongoing assistance to strengthen mechanisms against financial irregularities, including robust reporting of fraud and corruption.
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Compiled by Betha Madhomu
