Latest news with #SOE
Express Tribune
12 hours ago
- Business
- Express Tribune
Govt admits poor SOE governance
The government's fiscal support to SOEs – through grants, subsidies, loans and other injections – exceeded Rs600 billion in six months, equivalent to nearly 10% of total revenue receipts. photo: FILE Listen to article In a rare statement, a cabinet body on Friday admitted that poor governance concerns persisted with low transparency in government-owned companies while their cumulative losses increased further to a record Rs5.9 trillion by December last year. The statement issued by the Ministry of Finance after a meeting of the Cabinet Committee on State-Owned Enterprises (CCoSOEs) appeared to be a serious charge sheet about the poor performance of SOEs during the July-December 2024 period of the current fiscal year, particularly the power sector performance. The energy-sector circular debt, comprising power and gas, jumped to Rs4.9 trillion by December last year. "Governance concerns persist, with low levels of transparency in beneficial interest disclosures under Section 30 (of the SOEs Act) and other compliance gaps," stated the Ministry of Finance. Finance Minister Muhammad Aurangzeb chaired the meeting. The statement added that "the lack of strategic alignment in business plans and operational inefficiencies across SOEs were identified as critical areas requiring urgent reforms". Muhammad Aurangzeb reaffirmed the government's commitment to strengthening the governance, operational efficiency and financial sustainability of key public sector entities, it said. The finance minister stressed the importance of aligning business plans with national priorities and addressing operational challenges in a timely and coordinated manner. The cabinet committee reviewed the performance of government entities during the first half of current fiscal year, which also coincided with the first year of the government of Prime Minister Shehbaz Sharif. "The cabinet committee noted with concern the staggering cumulative losses of SOEs amounting to Rs5.8 trillion," said the finance ministry. It added that Rs342 billion in additional losses were incurred in just the last six months - equating to a daily loss of Rs1.9 billion. Aurangzeb "emphasised that issues such as inefficiencies in DISCOs' (distribution companies) operations, slow network upgrades by National Transmission and Despatch Company, unfunded pension liabilities and low governance standards continue to erode fiscal space and undermine investor confidence". The finance minister stressed the importance of timely reforms, particularly in power and energy sectors, where circular debt has crossed Rs4.9 trillion, it added. The government reiterated the resolve to bring greater transparency, financial discipline and accountability to the SOE landscape. The finance ministry said that the Central Monitoring Unit gave a detailed briefing on a biannual report on the federal SOE performance covering the period from July to December 2024. The report included a detailed overview of the state of affairs and key challenges confronting state-owned enterprises, including cumulative losses amounting to Rs5.8 trillion, with Rs342 billion being incurred in just six months. The committee was told that circular debt in oil, gas and power sectors crossed Rs4.9 trillion, severely affecting cash flows and asset valuations. The government's fiscal support to SOEs – through grants, subsidies, loans and other injections – also exceeded Rs600 billion in six months, equivalent to nearly 10% of total revenue receipts. In addition, unfunded pension liabilities in DISCOs and other SOEs, estimated at Rs1.7 trillion, remain off the books, as in the case of railways' pension obligations, the meeting was told. It was highlighted that government guarantees currently stood at Rs2.2 trillion, while rollover costs and financial restructuring liabilities further compound fiscal pressures. The finance minister emphasised that directors representing the government on boards of SOEs must exercise due diligence and play an active role in safeguarding the financial health and operational performance of the entities through informed and responsible input. In a recent meeting of the National Assembly Standing Committee on Finance, Muhammad Aurangzeb said that government nominees on SOE boards were performing below requirements and they needed to pull their socks up. The cabinet committee also approved new nominees on various boards. It approved the appointment of chairman of the Quetta Electric Supply Company (Qesco) board, constitution of the board of directors of the Independent System Market Operator, appointment of independent director/chairman on the board of Gujranwala Electric Power Company (Gepco) and independent director on Genco Holding Company Limited (GHCL). It approved the nomination of independent directors on the board of Multan Electric Power Company (Mepco), Power Information Technology Company and the constitution of the board of Energy Infrastructure Development and Management Company. The cabinet body approved the winding up of three subsidiaries of the Ministry of Railways, which included RAILCOP, PRACS and PRFTC.
Business Times
5 days ago
- Business
- Business Times
China asks state-owned developers to avoid public debt defaults
China has introduced a requirement for state-owned developers to avoid defaulting on publicly issued debt, in the latest attempt by authorities to contain the nation's prolonged property crisis. The State-owned Assets Supervision and Administration Commission (SASAC) added the directive to its latest performance metrics for about 20 developers that are controlled by the central government, people with knowledge of the matter said, asking not to be identified discussing a private matter. The commission did not respond to a faxed request for comment on Monday (Jun 23). While the regulator has so far stopped short of providing additional support to backstop the developers, the new stipulation underscores growing urgency to contain credit risks from China's protracted property downturn. Most of the biggest private developers have defaulted since 2021, shattering confidence in the housing market and leaving a pile of distressed debt that currently stands at almost US$140 billion. So far, state-owned developers have avoided the same fate, and their onshore bonds are trading at levels that suggest bondholders expect repayment. The companies overseen by SASAC range from leading firm Poly Developments & Holdings Group to smaller builder CCCG Real Estate. SASAC sets financial indicators for state-owned enterprises such as total profit and the ratio of debts to assets. While there's no guaranteed way to prevent SOEs from defaulting without higher-level intervention, the requirements are designed to ensure officials at the helm remain accountable for performance. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up One major developer, China Vanke, received state support in January, although that was led by local authorities in the company's hometown of Shenzhen. Vanke, which is backed by a local SOE, is not considered a central government-controlled developer. China's housing slump has dragged on for four years, with little sign of improvement. Prices of new homes slid the most in seven months in May, and sales also fell, signalling the effects of a stimulus blitz last September is wearing off. Like their privately owned peers, SOE developers have felt pressure from slumping sales. Last year, some resorted to steep price cuts to rekindle transactions. 'China's state-owned and private developers are both susceptible to a possible renewed property sales downturn,' Bloomberg Intelligence analyst Kristy Hung wrote in a recent note. She warned that state-owned builders face the risk of a full-year decline in sales this year. Central government-owned developers mostly rely on domestic financing, and the majority of their onshore bonds trade near or at par. Poly's 3.17 per cent yuan bond due next year even traded above par last week. But when considering those owned by local governments, yields of yuan bonds of state developers were the highest among 32 sectors, standing above 2.2 per cent in May, according to a note by China International Capital Corp. Some smaller firms are struggling. CCCG Real Estate, which operates under a state-owned infrastructure enterprise, has been on the brink of delisting from the Shenzhen stock exchange since April. It's the first listed state builder to be warned by the exchange for such risk. CCCG Real Estate expanded quickly in the three years since 2019, when it made a bold target to triple sales. Later, it booked two straight years of losses that left it with negative net equity, breaching the bourse's listing rules. To avoid delisting, it agreed to sell its entire real estate business to its parent firm for one yuan (S$0.18), according to an exchange filing on Jun 16. Still, all of CCCG Real Estate's 5 yuan bonds were trading above 98 yuan last week, Bloomberg-compiled data show. Premier Li Qiang this month pledged action to stop the decline in the real estate market, which has been depressing household sentiment just as the government is trying to boost consumption and offset the threat to exports from US tariffs. Even if China's housing market picks up, the long-term outlook remains grim. Demand for new homes in cities is expected to stay at 75 per cent below its 2017 peak in the coming years, due in part to a shrinking population, Goldman Sachs Group estimated. BLOOMBERG
The Citizen
17-06-2025
- Business
- The Citizen
Transnet capitulating to unions shows lack of leadership on both sides
Giving in to the unions makes it difficult to hold Transnet, the SOE that can grow the economy, to account. Transnet capitulated to unions threatening to strike last week and awarded annual pay increases of 6%, showing a lack of leadership on both sides of the table, with militant unions holding the country hostage with strike threats and management caving in to their demands without a fight. Busisiwe Mavuso, CEO of Business Leadership South Africa, writes in her weekly newsletter that this scenario shows that the country needs serious action and leadership from government to push Transnet in the right direction. 'While South African businesses slash costs and workers face retrenchments, Transnet workers will get pay increases of double the inflation rate, funded by taxpayers already struggling to make ends meet. 'Inflation is running at 2.8% and the economy is expected to only grow by 1.4% this year. The news came days after National Treasury agreed to give Transnet additional guarantees to enable it to manage its huge debt pile.' ALSO READ: Victory for Transnet: more cash incoming, union accepts salary increase Transnet's logistics nightmare causing layoffs in the private sector She points out that the bleak economic outlook is leading to severe belt-tightening in the private sector, with managers everywhere having to find ways to save and hoard cash to trade during tough conditions. 'Inevitably, some firms are going to fail, and workers will find themselves out of a job. Yet the unions threatened to bring the entire logistics network to a standstill unless their excessive demands were met, showing complete disregard for the economic factors that affect us all. 'It is even more shocking when you consider the role Transnet plays in perpetuating our economic predicament. Transnet's poor performance has been a major contributor to our dismal growth outlook. 'Stellenbosch University professor Jan Havenga estimated that Transnet costs the economy R1 billion every day due to its poor performance in moving goods around the country and out through our ports. That is equivalent to wiping out the entire annual budget of a midsize municipality every day. It equates to about 5% of gross domestic product (GDP).' ALSO READ: R26 billion rescue from World Bank: Can the loan save Eskom and Transnet? Transnet inefficiency affecting Goodyear, SAB and mines Mavuso points out that the unions act as if we live in a world we have not seen for 15 years, when growth was running above 5% and government boasted a budget surplus. Instead, she says, we live in a world where: Goodyear Tyres just let more than 900 workers go after having to shut its 78-year-old plant in the Eastern Cape, affecting thousands more jobs down the value chain South African Breweries is engaging with unions regarding the potential retrenchment of workers across its operations. Mines across the country are retrenching thousands because they cannot get their output to the markets. In many of these cases, Mavuso says, union action at Transnet is a direct contributor to this job carnage. 'The failure here is twofold: unions' refusal to accept performance-linked pay and management's refusal to insist on it. 'If workers were to get increases linked to Transnet's performance, we could support these. Bonuses could be tied to improvements in volumes shipped through ports and on rails, or specific metrics like international port efficiency rankings, which currently put South Africa's ports among the worst in the world.' Instead, she says, the unions demand guaranteed increases regardless of whether Transnet improves its service delivery. ALSO READ: This is where we would be if SA sustained an economic growth rate of 4.5% Toxic dynamic where unions treat state as ATM Mavuso says this represents a toxic dynamic where unions treat the state as an endless ATM. 'Private sector unions understand that companies must remain viable to protect jobs, but Transnet's unions can make unreasonable demands, knowing that management cannot afford to have their suboptimal operations interrupted, as this will put a further strain on the economy. 'Worse still, they secured additional job security guarantees in this wage agreement, further limiting Transnet's flexibility to restructure and improve performance. The unions know exactly what they are doing. They understand that by threatening strikes at Transnet, they can hold the entire economy hostage. 'They know that government will always cave in rather than face the economic disruption of a logistics shutdown. This is economic blackmail pure and simple, and taxpayers are footing the bill while the economy suffers.' Mavuso says she has written extensively about the solutions needed for Transnet, including private sector investment and competition. However, as long as militant unions can veto any meaningful reform through strike threats, we will remain trapped in this cycle of poor performance and endless bailouts. ALSO READ: Are threats against Transnet over? CCMA sends revised offer to halt strike Unions protect members in Transnet at expense of economic well-being of SA 'The unions made it clear they prefer protecting their members' privileges over the economic well-being of the country. The wage settlement shows just how unhelpful these unions can become to South Africa's economic prospects. 'We need government to finally take a firmer stance. Treasury must demand that any future bailouts come with strict conditions that break the unions' stranglehold over Transnet's operations. Treasury must insist on performance metrics as strict as those facing any private company seeking bailout funds, and the power to override union objections when restructuring is needed.' Business wants to partner with Transnet, but Mavuso says the unions' actions are not helpful, and they do not support the economic recovery everybody is trying to achieve. 'Until government finds a way of confronting union militancy at state-owned enterprises, taxpayers will continue subsidising this destructive cycle while our economy stagnates. 'The unions must be called on to contribute to solutions of rebuilding our economy rather than exacerbating its challenges,' she says.
The Star
14-06-2025
- Business
- The Star
China's top baijiu maker faces sobering reality as austerity trims profits
China's premier liquor distiller Kweichow Moutai – a brand that had, over decades, become synonymous with sumptuous feasts – is heeding a renewed mandate for austerity from Beijing, distancing its products from the extravagant hard-drinking lifestyle with which it had been linked in the public consciousness. Management at the company, valued at 1.86 trillion yuan (US$258.73 billion), has pledged to comply with strictures stressing thrift – guidelines that have helped to remove Moutai's expensive baijiu liquor from government banquets and narrowed the firm's profit margin further. Senior executives vowed to remain vigilant against the risks of corruption at a company meeting on Tuesday, where Moutai chairman Zhang Deqin invoked classic Chinese texts to argue the liquor must promote culture, health and harmony. 'With the baijiu , rites and traditions are upheld, the aged are nourished and joy is shared,' Zhang said, citing the Book of Rites and the Classic of Poetry, both of which date back centuries. Moutai's notoriously strong liquor – around 50 per cent alcohol by volume – has been the drink of choice for China's officials and executives since the early years of the Communist Party. After revolutionary leaders Mao Zedong and Zhou Enlai developed a taste for the spirit during their time in the southwestern province of Guizhou, the distinct white bottles have been given as official gifts to visiting dignitaries and become a fixture at lavish dinners. Zhang's remarks followed a March revival of orders to curtail inordinate expenditures on dining, showy official junkets and other entertainment. Most notably, President Xi Jinping has reiterated an eight-point code of conduct - first released in 2012 - to ensure officials do not hold costly receptions at the public's expense. As an SOE it must toe the party line on austerity, even at the cost of its sales The Central Commission for Discipline Inspection, the party's top anti-corruption organ, has republished up to 80 detailed rules related to the topic, including a ban on party and government dinners and meetings held at popular visitor attractions. 'Working meals should serve ordinary dishes in a home-cooking style. High-end dishes should be avoided, along with cigarettes and high-end liquor,' reads one rule. Moutai's leaders are likely to feel more pressure than most to demonstrate their fealty to official directives. Within the last decade, company chairmen Yuan Renguo and Gao Weidong were given separate prison sentences for bribery; Yuan, placed under investigation in 2019, died of a cerebral haemorrhage in 2023. These developments may spell lean times for Moutai. One of China's largest listed companies by market capitalisation, the company has earned a sizeable profit from the rich and powerful - and the heavy drinking of political cadres. 'Moutai's expensive baijiu and its political duty as a state-owned enterprise (SOE) are seen as at odds,' said Tang Dajie, a senior researcher with the China Enterprise Institute think tank in Beijing. 'As a profit-making company it certainly hopes more customers, including officials, can drink its products,' he added. 'But as an SOE it must toe the party line on austerity, even at the cost of its sales.' When Moutai held an annual shareholder reception in May, tables no longer groaned under rows of heavy white bottles. Instead, orange juice and other non-alcoholic drinks were served. Explaining the change, Moutai's Zhang said at the Tuesday meeting that as an SOE, the company must implement Beijing's decisions to combat waste. He went so far as to support a de facto baijiu ban at official functions and dinners being enforced in many localities, as well as gatherings held by other SOEs. The company also conducted a management overhaul this week, promoting younger executives to reform the firm's sales and marketing strategies. But Tang, the researcher, pointed out that Moutai cannot control how its baijiu is consumed, and its high prices are largely determined by the market. 'It has better taste and quality, and many people stock up on Moutai baijiu as an investment,' he said. 'Though Beijing's austerity push is correct, the government should not intervene in market activities.' The push to trim spending has come at an inopportune moment for Moutai, as muted economic activity has further quelled consumers' thirst for liquor. A May report from Soochow Securities said the company's years-long streak of double-digit revenue and profit growth will end in 2025. Accordingly, prices have been dropping since 2024. As of Wednesday, on several liquor trading platforms, the price of a bottle of 25-year-old Moutai had fallen below 2,000 yuan (US$278), half what had been demanded in more prosperous times. - SOUTH CHINA MORNING POST
Scottish Sun
11-06-2025
- Business
- Scottish Sun
Inside little-known Scots home once served as WW2 secret spy base now up for sale
The historic six-bedroom property dates back to the 19th century RURAL RE-TREAT Inside little-known Scots home once served as WW2 secret spy base now up for sale Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) A COUNTRY lodge once used as a secret spy base during the Second World War has hit the market. Inverlair Lodge in Roy Bridge, Highlands, is nestled between the Cairngorms National Park and the Great Glen. Sign up for Scottish Sun newsletter Sign up 5 Inverlair Lodge in Scottish Highlands is on the market Credit: Galbraith 5 It comes with over 30 acres of land and is for sale for offers over £1.35m Credit: Galbraith 5 The property has been "sensitively" modernised in recent years Credit: Galbraith 5 There are six large bedrooms throughout the building Credit: Galbraith 5 There are four bathrooms Credit: Galbraith The historic six-bedroom property dates back to the 19th century and was once the shooting lodge of Lord Abinger of Inverlochy Castle. Inverlair Lodge was used by the Special Operations Executive during WWII. The organisation was formed in 1940 to carry out covert duties, including espionage, sabotage and reconnaissance. It also helped resistance movements in occupied regions across Europe and other parts of the world. The SOE was disbanded after the war and Inverlair fell into disrepair. But it was renovated by new owners in the 1970s and it was then purchased in 2008. Inverlair is up for sale for offers over £1,350,000 and sellers Galbraith have hailed it as "an outstanding compact estate of historical note". The house has been "sensitively" modernised by the current owners. The sprawling grounds and outbuildings have also been upgrade. Inverlair features six spacious bedrooms, four bathrooms and a spacious living area, including a roomy conservatory. Unassuming corner shop was seen by millions on classic 70s sitcom - but would you recognise it? The heating system has recently been zoned, with double glazing added to all the living spaces. There is also a new utility room, a new second staircase to the first floor, and the kitchen has been renovated to make a spacious dining room with a spacious sitting area. Some original features have been kept, restored or replicated, including the curved inner wall, cornicing and fireplaces. Set over 30 acres of pristine countryside, Inverlair Lodge lies close to the River Spean, and Creag Meagaidh and Ben Alder mountains. The property is located away from the touristy hustle and bustle of Fort William but is still close to outdoor faciltiies, such as the Nevis Range Mountain Resort. The single-track road that passes the house terminates in a car park and from here there are waymarked walks and access to three Munros. There are also excellent spots nearvy for those interested in fishing, stalking and shooting. Inverlair Lodge itself also has a network of tracks and paths throughout the grounds, as well as a wetland area and magnificent mature woodland. Spean Bridge is around eight miles away, where there is a primary school, train station, general store and a hotel. Fort William also has several major retailers and supermarkets, secondary school, a leisure centre, and cafes and restaurants. There is also a train station 1.5 miles away at Tulloch Bridge, with an overnight train service direct to and from London Euston.
