By Jackie Cameron
- ABB will repay R1,56 billion to South Africa’s power utility, the latest international company to return money after being ensnared in corruption probes in the country, reports Bloomberg. The reimbursement was agreed with the nation’s Special Investigating Unit, state-owned Eskom Holdings SOC Ltd. said in a statement Friday. ABB has already accounted for the bulk of the payment in its financials, the Zurich-based company said in a separate statement. By returning the funds, ABB joins McKinsey & Co. and KPMG LLP among firms that have given back money they’ve earned in South Africa from contracts tainted by graft. McKinsey this week said it would repay R650 million to Transnet and SAA after handing back R1 billion to Eskom two years ago. The US consultancy’s chief risk officer testified at a state judicial inquiry on Thursday. The recovery is the biggest ever by the SIU and sends ‘a clear message about the commitment of government to assist the SIU and other law-enforcement agencies to do their jobs,’ Justice Minister Ronald Lamola said at a briefing.
- Meanwhile, South Africans have been subjected to power cuts again. Scheduled outages, known as loadshedding, will continue from Sunday so reserves can fully recover, it said. Eskom has already made record power cuts this year, according to the Council for Scientific and Industrial Research. The opposition alliance has slammed efforts to fix the troubled power utility, with Kevin Mileham MP – DA Shadow Minister of Energy saying that demand today is more than 6000 MW lower than it was 5 years ago. More generation capacity has been brought online (Medupi and Khusile) and new IPP projects are being brought into operation weekly. Among the problems: Eskom is behind on its plant maintenance and it is easy to bureaucratic red tape for municipalities to procure their own power has not been eased, despite the amendments to schedule 2 of the Electricity Regulation Act. For more on that, go to BizNews.com.
- In a blow for shareholders, gaming and leisure company Phumelela has announced it will cease trading on the Johannesburg stock exchange. The company has gone into business rescue, with an interim temporary financial director appointed. It is not clear at this stage whether, at the end of business rescue, any surplus funds will be available for distribution to shareholders, it said. The Company will maintain a register of Shareholders who will be advised accordingly via the business rescue status reports issued monthly to affected persons.
- Last week, the rand hit a 10-month high after Tuesday’s third quarter economic growth data showed a better than expected rebound. But this news was soon dampened by a government announcement that Covid-19 cases were spiking. The rand retreated after Health Minister Zweli Mkhize said on Wednesday four of the country’s nine provinces were driving a resurgence in cases. South Africa is the continent’s hardest-hit country with more than 828,000 confirmed coronavirus cases and over 22,000 deaths. “The capital flowing into SA is primarily ‘hot money’ and not the much sought after FDI, meaning it will leave the country as quickly as it is flowed in, should sentiment sour,” economists at ETM Analytics are quoted as saying. Stocks ticked up, with the benchmark all-share index and the blue-chip top 40 companies both ending a quarter of a percent firmer. Amongst the gainers were banking shares, which gained 2.63%, with Capitec Bank closing 8.12% stronger.
Read also:
- ABB to repay R1,56bn to Eskom, biggest SIU recovery ever
- Five easy steps to solve Eskom power cuts – DA
- Phumelela cancels JSE listing as it moves to business rescue – statement
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