Photo by [Biznews]
On Monday (April 3), Eskom issued a statement regarding its exemption from disclosing irregular expenditures in the annual financial statements. The communication read, the “expenses will now be reported in Eskom’s Annual Report, as opposed to its Annual Financial Statements.”
Energy Expert Chris Yelland spoke to individuals affiliated with the power utility. Confirming that they would soon report the expenses in what they called the “Eskom Consolidated Report”.
Eskom stated it welcomes the exemptions and assures South Africans they are committed to complying with applicable legislation and that it “will abide to the conditions and strict monitoring requirements imposed by National Treasury in granting the exemption”.
Days before (March 31), Finance Minister Enoch Godongwana gazetted a notice which exempts Eskom from disclosing any irregular “and fruitless and wasteful expenditure”. The exemption period will be in effect for this year, 22/23 and the upcoming two years, 23/24 and 24/25.
The Lack of Reasoning and Explanation by the Finance Minister
Speaking to Salaamedia’s Ashraf Garda, Yelland said the news regarding the exemption was quite disturbing as the decision seemed very sudden, and the reasoning behind it was unclear and unaccompanied by a formal explanation.
“What I just can’t understand, and I’m waiting for an explanation, is why [is it] necessary now to not report it [expenditures] in the annual financial statement firstly and why [is the exemption] only for a limited period?”
It raises questions, such as what does Eskom have to hide? How does this benefit and assist them in their efforts to resolve their issues?
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Public Perception and Opinion Regarding the Notice
Without any formal explanation, the decision by the Finance Minister has stirred public concern and doubt regarding the government’s shady history of handling the finances of state-owned entities.
The decision garnered condemnation and criticism from opposition party leaders, organisations, experts and citizens because Eskom has a reputation for corruption, fraud and theft.
And given the lack of communication and transparency, Yelland believes the exemption raises public suspicion and makes room for negative speculation. As many think the decision encourages more corruption and more theft at the power utility.
“To leave this matter hanging and to create this kind of speculation without giving clear answers is very poor communication. It must raise a lot of doubt in the minds of the public, the media and very importantly in the investment community.”
