LETTER: Prescribed assets puts focus on fund managers
Companies should declare their positions on it and their attitude to billions in clients’ assets in their stewardship
The Institute of Race Relations has long warned that SA is facing a threat to property rights. Since late 2017, this has taken the form of the expropriation without compensation (EWC) policy drive.
As this is typically wrapped up in the language of land reform, many mistakenly assume it is about land — and chiefly for farmers to deal with. This is incorrect. Property takes many forms, and so does EWC.
The prospect of prescribed assets (mandatory investments in government-approved projects) is very real. Leading government and ANC figures have suggested a prescribed-assets regime for some time. Due to the parlous state of the fiscus, it offers a possible source of ready cash at the expense of the country’s savers, policyholders and investors.
It could mean forcing fund managers to invest a part of your pension in Eskom or SAA. This is a significant threat to the financial wellbeing of millions of people. It also provides an avenue for the government to avoid making the tough choices needed to get the country back on track to prosperity.
We have thus been approaching fund managers to ask whether they will co-operate with the government on prescribed assets, or whether they will take action to protect their clients’ interests. Some of the responses have been hostile, including the allegation that we are making “threats”, as reflected in your report (“Sygnia CEO Magda Wierzycka accuses IRR of blackmail”, September 14).
This is not true. The threat exists in the plan for prescribed assets. Businesses need to declare their positions on this, and on their attitude to the billions of rand in clients’ assets that are in their stewardship. Ethical business and good corporate citizenship require nothing less.
Terence Corrigan, Institute of Race Relations
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