/ 2 October 2018

Mining investment scheme bites PIC in report

A report by auditor general Kimi Makwetu reveals ‘management lapses’ at SAA.
"As disclosed, the public entity incurred irregular expenditure of R128 590 000, as it did not follow a proper tender process and the public entity exceeded its expenditure in terms of its approved budget," said Kimi Makwetu. (Lisa Hnatowicz/Beeld)

The re-evaluation of an investment in Bophelo Insurance Group (BIG) has come back to bite the Public Investment Corporation (PIC) in the company’s audit report of its 2018 financial year, causing an impairment loss of over R82.2-million.

Auditor general Kimi Makwetu gave the PIC an unqualified audit with findings. The finding is related to the Bophelo investment impairment.

Last year the Financial Services Board placed the Bophelo Benefits Scheme and the Bophelo Beneficiary Fund under curatorship after it was reported that R225-million in mineworkers’ pension funds went missing from the fund.

The PIC reportedly entrusted more than R3.5-billion to Mvunonala, of which Bophelo Insurance Group is a subsidiary.

Last yearBusiness Day newspaper reported that Mvunonala chief executive Angel Nyathela committed to investigating the R225-million after she succeeded Bongani Mhlanga following the deportation of the latter.

The PIC is also in the process of probing its chief executive Dan Matjila for allegations including private e-mails which claim that he by-passed processes to arrange a contract for a close associate. Matjila has denied the allegations.

In his audit report, Makwetu said while he believed that the audit evidence that he obtained was sufficient and appropriate to provide a basis for his finding, PIC’s link to BIG was a point of emphasis.

“As disclosed in note 21 to the financial statements, impairment loss of R82 296 000 was incurred as a result of a revaluation of the investment in BIG to a net realisable value of nil,” said Makwetu.

According to the board’s remarks in the annual report, PIC has a 46% shareholding in Harith Fund Managers, 30% shareholding in Harith General Partners, 30% in Bophelo Insurance Group and 7% in the SA SME Fund. – Fin24