The Blackout Bulletin

Cabinet approval has been granted for the Draft National State Enterprises Bill, signaling a significant step in reshaping the management and oversight of the nation’s state-owned enterprises (SOEs).

The proposed legislation aims to establish the State Asset Management SOC Ltd, a new state-owned holding company entrusted with the financial management of various SOEs following the anticipated closure of the Department of Public Enterprises.

Key Objectives of the Bill Include:

1. Establishment of State Asset Management SOC Ltd: The creation of a holding company dedicated to overseeing state assets.
2. Sole Shareholder Role for the State: Designating the State as the exclusive shareholder of the holding company.
3. Consolidation of State Shareholdings: Bringing together the State’s shareholdings in various state enterprises under the holding company.
4. Empowering the Shareholder (State): Defining the powers of the shareholder (the State) on behalf of the holding company.
5. Phased Succession of State Enterprises: Providing a framework for the gradual transition of state enterprises to the holding company.
6. Management Powers for Subsidiaries: Outlining the holding company’s powers as a shareholder over its subsidiaries.
7. Restructuring and Management for Developmental Purposes: Facilitating the restructuring and management of subsidiaries with a focus on developmental objectives.
8. Performance Monitoring Mechanisms: Establishing effective performance monitoring mechanisms for subsidiaries.
9. Corporatisation of State Enterprises: Addressing the corporatisation of state enterprises not registered as companies.
10. Connected Matters: Covering various aspects and provisions related to the aforementioned objectives.

STATE ASSET MANAGEMENT SOC WILL BE A CENTRAL PLAYER

CEO of Business Leadership South Africa, Busisiwe Mavuso, expressed optimism about the State Asset Management SOC Ltd’s potential to revitalize struggling SOEs. She emphasized the need for the holding company to operate independently, with an experienced board focused on financial performance rather than political considerations.

While Mavuso highlighted positive aspects of the Bill, concerns were raised about potential limitations on minority ownership and the President’s exclusive representation rather than involving the Minister of Finance.

The success of the new holding company, according to Mavuso, will depend on meticulous implementation to avoid it becoming an expensive endeavor with limited value.