New National State Enterprises Bill not immune to state capture: Expert

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Corporate governance expert Professor Peter Goss says that the newly published National State Enterprises Bill- aimed at re-organising SOEs, is not immune to state capture.

The Bill is looking to create a new state-owned holding company once the Department of Public Enterprises is done away with after next year’s elections.

It will also consolidate the state’s shareholdings in state enterprises and create a state asset management company.

Gross says the Bill is an example of the destruction of the principle of distribution of power.

“One of the fundamental problems with state capture was the super centralisation of power. This act makes a provision for the President to serve as the sole representative of the holding company, in other words, the sole shareholder representative of the holding company.”

“So, if you ever wanted to see an example of a destruction of the principle of distribution of the balance of power – it is in this Bill. It over-centralises power, it allows the President far-reaching authority that he could exercise, even without consultation with the board of directors,” adds Gross.