Rebooting State-Owned Companies in South Africa: Exploring the Viability of Singapore's State Holding Company (Temasek) Model of Ownership and Control

Abstract

This paper joins the growing discourse in search of a responsive governance model for state-owned companies (SOCs) in South Africa capable of engendering corporate governance and financial viability. The Singaporean state-holding company model of the ownership and control of SOCs’ (Temasek model), which is driven by Temasek Holdings is widely considered to be the gold standard of corporate governance and financial viability across the SOCs landscape. Policymakers and scholars alike have proposed the adoption of this model in South Africa, however, the proposals have fallen short of critically examining the model’s salient attributes, the legal and regulatory environment within which the model operates, as well as the socio-political and economic logic of the model to test its viability in the South African context. This paper closes this gap by advancing a four-pronged examination of the model. First, the paper provides a nuanced understanding of the nature of the so-called ‘Singapore Inc’. Secondly, it delves deeper into the model's anchoring legal and regulatory framework. Penultimately, the promise and pitfalls of the mode are identified. In conclusion, the paper argues that the Temasek model is exceptional in many respects and that its exceptionalism necessitates a cautious and nuanced adoption that considers the idiosyncratic circumstances of South Africa. In this regard, the paper proposes an adaptation of the Temasek model and argues that the model can apply only to SOCs with commercial orientation. The paper proposes a super-agency akin to the Chinese State-owned Assets Supervision and Administration Commission of the State Council (SASAC) for non-commercial entities to discharge centralised ownership and control functions. In essence, the paper argues that a viable model of ownership and control for SOCs capable of engendering sound corporate governance and financial viability in South Africa’s SOCs is not a single entity model in the form of a state-holding company but rather a twin-track model with one track catering for commercial entities and another for non-commercial entities.