Business Leadership South Africa (BLSA) on Thursday booted out state-owned entities Eskom and Transnet for their involvement in corruption and State capture with immediate effect.

The announcement comes as BLSA launched its #BusinessBelieves campaign in Cape Town, where it signed a “contract” with South Africa, pledging to do even more to create jobs and grow and transform the economy.

The latest suspensions follow auditing firm KPMG SA's suspension for the role it played in facilitating State capture and the misleading SARS "rogue unit" report.

BLSA said in a statement the suspension of Eskom and Transnet comes after engagement with the two State-owned enterprises (SOEs) in connection with extensive allegations of corrupt behaviour over a long period.

BLSA CEO Bonang Mohale said South Africans have been rightly disturbed in recent times over the numerous allegations of corrupt behaviour and colossal failures of corporate governance and accountability at both Eskom and Transnet.

"This behaviour is entirely at odds with the values of BLSA, captured in our integrity pledge. Neither of the SOEs were able to give BLSA comfort that they appreciated the seriousness of the issues at hand, or that they had the requisite will and purpose to put their houses in order," Mohale said.

"This left BLSA with no choice but to suspend their memberships from the organisation. We have to live by our values and will take a zero-tolerance approach to any organisation found in breach."

Eskom in particular - as the country's national electricity provider - is a strategic asset and due to multiple governance and operational failures, and a stretched balance sheet, now represents systemic risk to the economy as a whole.

Eskom looms large as threat to stability and growth

"Until and unless a non-conflicted, experienced and permanent chairman and board are appointed - who in turn appoint an experienced and honest executive team - Eskom will loom large over the economy as a threat to stability and economic growth."

Mohale emphasised that there are thousands of honest Eskom employees doing honest and brave work, in the face of a seemingly endless pattern of corruption at the top.

BLSA also repeated its earlier appeal that government should proceed expeditiously to set up the judicial investigation into state capture recommended nearly a year ago by the then Public Protector, Thuli Madonsela.

"Any employees found to have been in breach of the law should be prosecuted," Mohale said.

Earlier on Thursday, when Mohale was addressing a grouping of business people, civil society and labour in Cape Town ahead of the signing of the "contract with South Africa", he said state capture is the single biggest threat to South Africa's 23-year-old democracy.

"State capture by this immigrant Indian family, the Guptas, for the benefit of another family, the Zumas. That’s the single most biggest threat."

He called President Jacob Zuma a "thief" and said BLSA wants to make sure the "snake's head is chopped off".