20100413
SABC

In a dramatic twist of events, the ruling ANC party has stated that it is not going to instruct its investment arm - Chancellor House to sell its controversial stake in Hitachi Power Africa. The ANC's Chancellor House owns 25% stake in Hitachi.

The ANC has drawn an onslaught of criticisms from opposition parties and labour federation Congress of South African Trade Unions (Cosatu) for the conflict of interest its stake in Hitachi poses. This is because Hitachi has won a multi-billion rand tender from state owned Eskom to provide boilers to its Medupi and Kusile power stations.

Eskom has also just secured a R29 billion loan from the World Bank to build the coal- fired power station. But the ruling party is putting its foot down, saying it is not for them to decide whether Chancellor House should sell its lucrative stake in Hitachi.

"Whether we are going to dispose of our stake... I do not think that decision should be taken in Luthuli House because you have got a company which is having a board and that decision must be taken by them," says ANC secretary general, Gwede Mantashe.

Drawing from its experience with its own investment company, called Kopano Ke Matla, Cosatu sharply disagrees with the ANC. "Because the board members can take decisions we do not like. We need to check if those decisions do not pose conflict of interest for the mother body," says Cosatu deputy secretary, Bheki Ntshalintshali.

Contradictory decision

The ANC decision now contradicts earlier assurances made by ANC Treasurer General Mathews Phosa that they have told Chancellor House to sell its share in Hitachi.

"It is very clear that there is uncertainty within the ANC’s ranks about whether they are doing the right thing or not. The fact of the matter is that Chancellor House/Hitachi relationship is a conflict of interest. It becomes a de facto fund raising mechanism which does not level the playing fields for the political processes in the country and it is certainly a threat to the principles of democracy in South Africa," says political analyst, Roelof Botha.

The ANC remains adamant that it has to generate its own funding because it no longer receives donor funding since apartheid ended.