Bloomberg reports that the Public Servants Association (PSA), whose members contribute most to the funds overseen by the Public Investment Corporation (PIC), wants the fund manager to stop investing in the debt of Eskom.  

The 240,000-strong union said that by buying Eskom’s bonds the PIC was exposing pensioners to excessive risk as the state-owned power company was not selling enough electricity to cover its costs and has had to be bailed out by the government.  It also urged the PIC to avoid investing in other struggling state-owned companies such as SA Airways.  The Government Employees Pension Fund (GEPF), managed by the PIC, holds R54.8bn of Eskom bonds, or 16.8% of all the debt outstanding which amounts to more than five times the next-biggest holder.  The PIC owns an additional R8.5bn of Eskom bonds on behalf of other clients.  “The PIC needs to get out of Eskom,” Tahir Maepa, the PSA’s deputy general manager for members’ affairs, said in an interview.  He added:  “So long as they have the PIC as a piggy bank they will never be able to sustain themselves and run like a business.  Eskom should be a business and not rely on bailouts from pensioners’ money.”  The influence of the PSA and other unions on the PIC is about to increase as three labour leaders, including the PSA’s top executive, are set to be appointed to the organisation’s interim board.

Read the full original of Antony Sguazzin’s report on the above summary at BusinessLive

Read too, Big three unions name candidates for PIC board, at Business Report

Get other news reports at the SA Labour News home page