The JSE has imposed a public censure and a fine of R3-million on State-owned utility Eskom over its failure to comply timeously with stipulations of the debt listings requirements (DLRs).

Eskom is listed on the JSE as an issuer of debt securities and, therefore, has a continuing obligation to comply with the JSE DLRs.

Eskom has failed to timeously publish policies dealing with the disclosure and treatment of dealings with board members and prescribed officers who are domestic prominent influential persons (DPIPs), and loans and procurement with any related party, DPIPs and prescribed officers, as well as the related registers, in accordance with DLRs.

The fine is wholly suspended for a period of three years on condition that Eskom is not found to be in breach of similar provisions of the DLRs during the period of suspension.

In 2020, the JSE implemented specific rules for State-owned entities or municipalities governing the disclosure of policies and the treatment of DPIPs and loans and procurement to related parties.

Eskom failed to comply with the provisions of the DLRs after its promulgation in 2020.

Following several delays and extension requests by Eskom since then, the entity had still not, by July 31, 2023, fulfilled its commitment to publish the relevant policies and registers.

Despite Eskom’s repeated undertakings to the JSE, the entity’s current register of loans and procurement with any related party DPIPs and prescribed officers, has not been published on its website, in clear disregard of the provisions of the DLRs, the JSE points out.

Even in those instances where the required policies and registers were published on the website, such publications were not made timeously and exceeded the time frames undertaken by Eskom and granted by the JSE, it adds.

Accordingly, the JSE found Eskom to be in breach of paragraphs 7.9, 7.10, 7.15 and 7.16 of the DLRs for failing to timeously publish the policies and registers.

“DPIPs, by virtue of their positions, can have significant influence over the issuer’s operations and financial decisions. Without transparent disclosure of how these individuals are treated and involved in the issuer’s affairs, there is a risk of conflicts of interest that can undermine investor confidence,” the JSE emphasises.

“Similarly, disclosing loans and procurement involving related parties is crucial. Transparent reporting allows noteholders to assess the fairness and integrity of these transactions. Failure to disclose such information deprives noteholders of crucial insights into potential risks and the issuer’s true financial health,” it adds.

Eskom, in a responding statement, acknowledges that it has not been fully compliant with the requirement to publish the policies and registers as required.

The JSE sanction is for not timeously publishing the policies and registers and in no way suggests any breach of the policies themselves, Eskom states.

The entity says it recognises the importance of effective governance and transparent disclosure for noteholder confidence, and that it has therefore taken significant steps to rectify the non-compliance and to ensure that Eskom remains compliant going forward.

The outstanding policies and registers (or appropriate statements) are now largely finalised and were published on the Eskom website on April 12 (policies) and June 28 (registers), the entity points out.

In terms of Eskom’s Politically Exposed Persons Policy dated April 8, the entity initiated a process of informing the top 100 suppliers of the new requirement to identify and maintain a register of suppliers who fall within the categories identified in paragraph 7.15 of the DLRs, it adds.

Eskom says it will publish the requisite register on or before October 31.

“Eskom is disappointed to have received a public censure and suspended fine from the JSE but is wholly committed to ensuring the entity complies with the DLRs and upholds the values and principles of good corporate governance,” it states.