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Eskom|Financial|Transnet
Eskom|Financial|Transnet
eskom|financial|transnet

Controversial Eskom exemption withdrawn 'for now'

Finance Minister Enoch Godongwana

Finance Minister Enoch Godongwana

5th April 2023

By: News24Wire

  

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To read a copy of the National Treasury's comment on the withdrawal of the exemption, click here  (0.32 MB)

Finance Minister Enoch Godongwana told MPs on Wednesday that he has decided to withdraw the exemption of Eskom from the Public Finance Management Act "for now" to have further consultation with the auditor-general and Eskom's auditors. 

A special government gazette issued by Godongwana on Friday exempted Eskom from reporting in its annual financial statements on wasteful and irregular expenditure that did not arise from corruption.

"Yesterday we had intensive discussions with the auditor-general (AG) and in that discussion there were some contributions from the AG that need to be part of the framing of the gazette," Godongwana said. 

"In the light of those comments and comments from the public, we have decided to withdraw the gazette for now and have more detailed discussions with the AG and Eskom's auditors so that the framing is proper and the checks and balances are tightened."

There has been widespread criticism of the exemption, which aimed to assist Eskom achieve an unqualified audit and boost its credit ratings. Treasury was also concerned that a qualified audit opinion will trigger Eskom's loan covenants and increase Eskom's cost of borrowing. A similar exemption was provided to Transnet last year.

DA spokesperson on finance Dion George said on Tuesday that the party had briefed its legal team to look into the legalities of the exemption, while ANC alliance partner Cosatu called it "a green light to criminals that they can go feast and loot with impunity".

Less than three hours after Godongwana announced the withdrawal, government said it officially terminated the national state of disaster it implemented just under two months ago to deal with South Africa's energy crisis.

Eskom said on Wednesday afternoon that it would comment on either matter yet, "pending our engagement with government".

Edited by News24Wire

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