By Linda van Tilburg
Here is today’s business Flash Briefing:
- Cyril Ramaphosa was elected unopposed as South Africa’s president by the National Assembly yesterday, while his deputy David Mabuza’s future is in doubt after he asked to delay the process in light of a report by the ANC’s integrity commission in which it said that Mabuza had brought the ANC into disrepute. The Rand gained after the news with the currency reversing an earlier decline and traded at R14.37 to the dollar late yesterday afternoon. The ANC also announced that Nomvula Mokonyane and Malusi Gigaba have withdrawn their candidacies as lawmakers. It means Ramaphosa has the flexibility to bring in two new MPs and he could nominate another deputy-president.
- The corruption clean-up operation appears to be gathering steam at the Passenger Rail Agency of South Africa (Prasa) as another three senior executives have been suspended as part of its ongoing investigations into corruption and wasteful expenditure. And…the employment contract of is former company secretary, Tumi Mohube has been terminated. On the list of those suspended are the chief strategy officer, Dr Sipho Sithole, the head of legal, risk and compliance, Martha Ngoye and an executive in the Group CEOs office, Tiro Holele. Prasa Group CEO Nkosinathi Sishi said he was claiming Prasa back from state capture and was determined to rid Prasa of corruption, nepotism and administrative inefficiencies.
- South Africa has decided to send Manuel Chang, the ex-Mozambique finance minister accused of fraud in a $2bn sovereign-debt scandal, known as the tuna bond scandal, home to Mozambique instead of the US to face charges. This came after an ex-Credit Suisse Group AG banker became the first person to plead guilty in the case. The ANC government does not have a great record in turning in alleged perpetrators from the African continent to international authorities. When former Sudanese president Mohammed Al-Bashir, wanted for war crimes by the International Criminal Court, travelled to Johannesburg to attend an African Union summit in 2015; the government allowed him to depart, even though a high court barred him from leaving.
- On the JSE yesterday, Sasol shares plummeted by almost 13% after it came to light that the cost of the Lake Charles chemicals project in Louisiana would balloon to as much as $12.9bn, which is a 50% increase in planned costs. It is a further setback for the development that’s part of Sasol’s plan to expand internationally. The share slump was the worst in 20 years. Other movers down on the day were Redefine properties, down 6.7%. Winners of the day were RCL Foods shares which rose by more than 4.5%, while Goldfields was up 4.3%.
- As speculation swirls about plans to deal with Eskom’s crippling debt, there is one group of stakeholders who say they are being kept in the dark; the owners of the company’s R243bn of bonds. One credit analyst which oversees R185bn of bonds including those of Eskom says they have not had any interaction with the company outside of the Stock Exchange News Service statements and newspaper reports. They also say they don’t have details of what would happen to current funding and a restructure. Investors have given Ramaphosa the benefit of the doubt so far but now that he has been sworn in, they say he needs to come up with a credible plan soon to fix Eskom that is regarded as the biggest threat to South Africa’s economy.
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