South Africa’s ruling African National Congress said it won’t invest in companies that benefit from government contracts following the sale of its stake in Hitachi Power Africa Ltd.
“There is nothing wrong with the ANC investing in any commercial entity, as long as the business does not have government as a direct source of income,” Zweli Mkhize, the party’s treasurer general, told reporters in Johannesburg today.
Chancellor House Holdings Ltd., the ANC’s investment arm, agreed last week to sell its 25 percent stake in Hitachi Power Africa to its parent, Tokyo-based Hitachi Ltd. (6501), for an undisclosed sum. The company’s South African unit had won 38.5 billion rand ($3.6 billion) of contracts from state electricity utility Eskom Holdings SOC Ltd. in 2007 to install boilers at power plants.
The ANC was criticized by opposition political parties and labor unions, who said the investment was a conflict of interest.
Mkhize said the ANC hasn’t received any funds from the stake sale, denying a report in the Johannesburg-based Sunday Times yesterday that the party may get 50 million rand from the disposal to help finance its election campaign.
Chancellor House is a separate entity to the ANC and gives “donations” to the ruling party like other businesses, Mkhize said. He declined to give specific details as the party doesn’t disclose information from donors.
“We should not criminalize money that comes to political parties,” he said.
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