Just as the Treasury, the Government Employees Pension Fund (GEPF) and the Public Investment Corporation (PIC) had begun to open the door to greater transparency of how this enormous pot of money is invested, they have shut it again.
The move to transparency seemed unstoppable. Several dubious investments in unlisted entities, pressure from ailing state-owned enterprises for "investments" and loans, and a close call with state capture — when the Treasury veered dangerously near to falling into the hands of looters — had made the lesson amply clear: the only way to protect savings of public servants and pensioners is public disclosure of investment decisions, especially those in the unlisted space.
For decades those at the helm of the PIC — which acts as the asset manager of the GEPF and other government social funds — have been subject to lobbying from the politically connected for loans and investments in deals dressed up as good for empowerment and transformation but not necessarily good for investors. For decades the PIC — under no scrutiny, except from its board appointed by the minister of finance — has been in the position of being able to pick and choose on whom to bestow largesse, making CEO Dan Matjila among the most important men in SA.
Two years ago, when Mcebisi Jonas was deputy minister of finance and chairman of the board of the PIC, he undertook on behalf of the PIC (in the presence of its somewhat reluctant management) in a parliamentary committee meeting to disclose unlisted investments.
What a shock it was then when the Treasury, in concurrence with the PIC and GEPF, in Parliament did not support proposed amendments to the PIC Act that would have compelled it to disclose all investments, particularly those in unlisted entities. Two amendment bills, one tabled by the standing committee on finance and another by DA MP David Maynier, both proposed full disclosure.
The bills also suggest that the chairman of the PIC be recommended for appointment by Parliament and there should be trade union representation on the board of the PIC.
In a document prepared by the Treasury "incorporating inputs from the PIC and the principal officer of the GEPF", all the amendments were rejected. At Tuesday’s meeting, GEPF principal officer Abel Sithole explained why at length.
He argued that because the assets were owned by the GEPF and managed by the PIC, it was the GEPF’s sole decision whether to disclose them. This would be done at the fund’s discretion and must not be compelled by law, he said.
At present, the GEPF makes some limited disclosures in its annual report, which include details on the top 10 investments in each asset class, with the rest under the title "other".
Though Sithole is correct in saying that the owner of the assets is not the PIC, he is wrong that the R1.8-trillion or so involved belongs to the GEPF.
As the Public Servants Association (PSA), one of the biggest trade unions belonging to the fund, has pointed out, this money belongs to pensioners and public servants and more than anyone else they are the ones with the right to know where it is invested.
The PSA is not going to accept the closing down of transparency without a fight. Full disclosure in a document tabled at the PIC’s AGM is its minimum requirement. It is not prepared to give up the fight that trade union representatives sit on the board of the PIC and are privy to decisions.
The PIC’s Matjila knows this well. In February he found himself humbled and had to apologise after he extended a R5bn bridging loan to Eskom, without consultation with unions.
So despite the united stance against transparency presented by the PIC, the GEPF and the Treasury, this fight is a long way from over. None among the chairman of the finance committee Yunus Carrim, Maynier or the unions involved is ready to concede. For the public, the investment community and the fight against corruption that is a good thing indeed.
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