President Cyril Ramaphosa has instituted a commission of inquiry into the Public Investment Corporation (PIC) to investigate “the veracity of alleged improprieties” with the aim of restoring confidence in the state-owned asset manager.
The establishment of the commission was gazetted in Wednesday’s edition of the Government Gazette where the terms of reference were listed. Ramaphosa announced in August that the commission would be formed.
The PIC is a state-owned company tasked with managing nearly R2-trillion in assets, more than 98% of which belongs to the government or its employees. This includes the Government Employees Pension Fund, the Unemployment Insurance Fund and the Compensation Fund.
“The PIC must be managed in accordance with the highest standard of ethics, integrity and efficiency, so that its governance and investment decisions are beyond reproach”, the document reads.
The commission will be chaired by former president of the Supreme Court of Appeal Justice Lex Mpati who will work alongside former Reserve Bank governor Gill Marcus and veteran asset manager, Emmanuel Lediga.
The commission will be tasked with investigating and making recommendations on whether the allegations reported in the media in 2017 and 2018 “contravened any legislation, PIC policy or contractual obligations” resulting in “undue benefit” for any director, employee, associate or their family members.
In addition, the PIC probe will look into whether the current governance and operating model is the most effective and if the board has been functioning efficiently and not contributing to negative perceptions of the entity.
The PIC has been implicated in several allegations of unsound financial management and governance issues when it comes to its investments in Steinhoff International, Eskom, Iqbal Survé’s Sagarmatha, a company linked to former finance minister Nhlanhla Nene’s son S&S Refinery LDA in Mozambique and VBS Mutual Bank.
PIC chief executive Dan Matjila has made headlines for allegations of impropriety.
He was accused last year of flouting PIC procedures when a company owned by a woman named Pretty Louw was funded to the tune of R21-million. The allegation, according to a whistleblower, was that Matjila and Louw were in a romantic relationship.
According to Business Day, Advocate Geoff Budlender — who was appointed by the PIC’s board to investigate Matjila’s alleged relationship with Louw — has handed in his final report saying that the two were not romantically involved and that Matjila intervened inappropriately in the funding at the order of then intelligence minister David Mahlobo.
The commission will investigate allegations against PIC from the period starting on January 1 2015 up to August 31 2018 and must hand the president an interim report by February 15 2019 and a final report by April 15 2019.
The investigations, however, will not be limited to the time period above mentioned as long as the process is not delayed and the reports are still submitted on time.
United Democratic Movement leader Bantu Holomisa in June called for Ramaphosa to address what he described as an “iceberg of corruption” at the PIC.
In a statement, Holomisa said the party welcomes the president’s “swift action” on appointing the commission after what it describes as Nene stalling.
“The inquiry should clean-up the mess at the PIC and get to the bottom of the rot we have seen exposed in the media for quite some time,” Holomisa said.
The party has also called for Matjila to be suspended with immediate effect.
Read the full document on the Government Gazette here: