PATEL SAYS DECISION BY OLD MUTUAL FOR SMALL BUSINESS FUND TO SPUR INVESTOR CONFIDENCE IN SOUTH AFRICA

PRETORIA, Economic Development Minister Ebrahim Patel says the decision by Old Mutual, the South African international investment, savings, insurance, and banking group, to hold off on retrenchments and to set up a 500 million Rand (about 40.2 million US dollar) fund to boost small businesses will spur investor confidence.

The Minister’s comments Wednesday followed a decision by Old Mutual to make South Africa the primary base for all of its emerging market activities. As part of the decision, it also announced its commitment to a range of public interest undertakings.

The move ‘back home’ of one of our premier financial institutions will help to inject investor confidence in the economy and is a well-timed signal that we can grow the economy in the period ahead and unlock the country’s potential of job creation and economic inclusion, said Patel.

The public interest commitments by Old Mutual, made under the Competition Act, include undertakings not to retrench any worker as a result of the transaction and to ensure that the company achieves best-of-class empowerment status within a prescribed time.

The move by the financial institution to establish a R500 million fund, following discussion with the Ministry, to drive the growth of small business and employment is a significant part of the company’s commitments. We look forward to the new jobs that will be created in the South African economy, particularly within small businesses, by the Development Fund, said Patel.

The transaction has the support of the Competition Commission and has been recommended to the Competition Tribunal for consideration and approval. It will thereafter be subject to shareholder approval.

Source: NAM NEWS NETWORK