IDC moves to transparency by publishing a list of businesses it lends to
The Industrial Development Corporation (IDC) is leading a charge toward greater transparency in state-owned institutions by publishing a list of businesses it lends to, and highlighting those deemed to be politically exposed persons.
Under the leadership of Economic Development minister Ebrahim Patel, the IDC has for the first time published a list of all who have been recipients of its developmental finance. The list pertains to those funded in the first quarter of the 2017-18 financial year with a commitment from the corporation to update the information every quarter.
Of the 13 clients listed in the document – titled ‘Disclosure of IDC funded business partners for first quarter of 2017 financial year – only one, Scaw Metals, was identified as having three politically exposed persons involved. The IDC is the majority shareholder in Scaw. The document showed Scaw was granted an investment amount of R250-million on June 11.
The politically-exposed persons were listed as follows: Neo Mokhesi, a former IDC executive who represents the IDC on the board of Scaw; Nkosemntu Nika, a former IDC director who represents the IDC on the board of Scaw; and ANC stalwart Sipho Pityana, a shareholder in Izingwe Holdings which is an indirect shareholder in Scaw.
The corporation’s move towards greater transparency follows after it was the target of a great deal of criticism of its decision to fund the Gupta family’s Oakbay Resources by way of a R250-million loan.
Speaking at the IDC’s annual results presentation on Monday, Patel said the corporation was responsible for the approval of large sums of money and must always be subject to high levels of integrity in its decisions.
“State-owned companies will need to systematically strengthen governance to take account of legitimate public concerns about corruption,” Patel said noting that the IDC has since June began to publish the details of those it provides funding to in order to enhance transparency and accountability.
“This will enable the public to see where the money goes and reassure that decisions are and should be based on transparent and proper criteria.”
He noted that the IDC board had also decided to exclude board members from doing business with the corporation for personal gain in a bid to strengthen accountability.
The Financial Intelligence Centre Amendment Act (FICA Act), gazetted in May, requires for all accountable institutions to identify clients as prominent influential persons – which will include the politically exposed – and better manage risks in their relationships with such clients.
The provisions of the Act which give effect to this will commence on 2 October.