Transnet should explain delayed release financial statements – Ghaleb Cachalia

DA MP says timely release of AFS is crucial for oversight, potential investor confidence and clarity on allocation of costs

Transnet should explain to Parliament the delayed release of its Annual Financial Statements 

11 October 2021

Note to Editors: Please find an attached soundbite by Ghaleb Cachalia MP

Transnet must urgently appear before the Public Enterprises Committee in Parliament to explain the delay in the release of its Annual Financial Statements (AFS).

Transnet’s AFS for the financial year ended 31 March 2021 and should have been released at the end of September 2021.

The timely release of AFS is crucial for oversight, potential investor confidence and clarity on the allocation of costs.

On 8 October 2021, Transnet issued a second ‘update to the market’ in which it presented more reasons as to delay the release of its AFS.

If Transnet had sound corporate governance practices in place, the reasons that it is citing for the delay should have been mitigated through timely interventions. Instead, Transnet has essentially outsourced its responsibilities to external third parties and is no longer in control of the process on the AFS release.

On the first ‘update to the market’ that they made on the 29 September, Transnet placed the blame on the delayed release of the AFS on the Auditor General. It is claimed that a delay in the completion of the External Audit by the A-G was one of the primary reasons for the delay. In the latest update, issued on 8 October 2021, Transnet now claims that consultations ‘on the matter of irregular expenditure, engagements with National Treasury as a custodian of the Public Finance Management Act, the AGSA and Transnet are still ongoing’. The next market update, they claim, will be on the 15th of October 2021.

To be clear, consultations with external third parties relevant to the release of the AFS should have been conducted early in the year. This scramble at the last minute is symptomatic of poor leadership and poor financial management practices.

The DA has tabled a private members bill to ensure the timely release of AFS.

Transnet’s behaviour does not inspire confidence and is guaranteed to negatively affect investor confidence. South African ports are already ranked poorly on international tracking indices and the rail and pipeline infrastructure is in a suboptimal state. This continued chaos within Transnet will only make the situation worse.

The DA will write to the Chairperson of the Public Enterprises Committee, Khayalethu Magaxa, requesting that he calls on Transnet to urgently appear before the committee to explain the delay in the release of its Annual Financial Statements (AFS).

Issued by Ghaleb Cachalia, DA Shadow Minister of Public Enterprises, 11 October 2021