State-owned enterprises and the banks have been in a complicated relationship for some time. Until July 2017 there were surprisingly few concerns among banks over loans and other financing to SOEs, despite mounting evidence of mismanagement and corruption. Even South African Airways — which with its infamous chairwoman, Dudu Myeni, was in the news for all the wrong reasons on a weekly basis — didn’t have problems getting money. Lenders looked past the balance sheets of the individual entities, comforted by state guarantees and the knowledge that the Treasury would step in. It came to a crashing halt around July, not because banks decided they had over-lent to the sector but because red flags were going up all over the place due to concerns over criminal conduct of SOEs and people associated with them. The closing of the credit lines was very effective and did more to bring about change than did months of exposés on corruption. Within months both SAA and Eskom had new boards and exec...

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