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IDC denies politically connected elite has ‘hijacked’ black industrialist scheme

ENGINEERING NEWS / 22 JUNE 2018 - 13.11 / TERENCE CREAMER

South Africa’s Industrial Development Corporation (IDC) has defended the integrity of the credit approval processes for its flagship Black Industrialist Programme and has given the assurance that the scheme has not be captured by individuals with connections to the governing African National Congress (ANC), as suggested in a recent media report.

The programme, which is aligned with government’s Industrial Policy Action Plan, has become a core feature of the State-owned development finance institution’s lending activities in recent years. In 2017/18, approvals of R7.9-billion were made under the scheme out of total approvals of R16.7-billion.

Photo by: Creamer Media Economic Development Minister Ebrahim Patel has promised that the IDC will release the names of beneficiaries

The article arose following the release of an answer by Economic Development Minister Ebrahim Patel to a Parliamentary question posed by Economic Freedom Fighters Member of Parliament Ntokozo Hlonyana. The reply included an Annexure, which named of each of the Black Industrialist Programme beneficiaries.

IDC divisional executive for corporate affairs Zama Luthuli describes the tone of the article as “unfortunate” and insists that the programme is being operated in strict adherence to the IDC’s in-house credit-approval processes.

She also notes that the publication of the list of beneficiaries, including those considered to be politically exposed persons, or PEPs, is in keeping with a renewed commitment at the IDC to full transparency and good governance.

She tells Engineering News Online the approvals process is also fully aligned with South Africa’s Financial Intelligence Centre Act, as well as the international Financial Action Task Force on Money Laundering in the way it deals with PEPs.

Individuals flagged as PEPs are not excluded from accessing the programme, but are subjected to a rigorous due-diligence exercise as part of the larger due diligence that is undertaken for all transactions. Should PEPs fail to comply, the transaction is immediately disallowed.

Since 1 April 2017, the IDC has also committed to publishing the names of all beneficiaries on its website on a quarterly basis. The names of all beneficiaries of IDC funding April 1 2017 can be found on the IDC’s website using this weblink.

Recipients of loans extended under the Black Industrialist Programme also have to meet the criteria for the scheme, including having black ownership of greater than 50% and/or the exercise control of the business by black individuals. The black owners should able be operationally involved and take a personal risk in the business, which should either be a manufacturing enterprise or in a sectors and makes long terms commitment to the business.

“We remain convinced that this is a good programme and will not be deterred from continuing to fund black industrialists,” Luthuli states.

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LINK : http://m.engineeringnews.co.za/article/idc-denies-politically-connected-elite-has-hijacked-black-industrialist-scheme-2018-06-22/rep_id:4433

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