A member of the newly constituted board of the Public Investment Corporation (PIC) is hoping for an uneventful year now that previous CEO Dan Matjila is "out of the way".
The board member, Xolani Mkhwanazi, was reappointed by finance minister Tito Mboweni, who announced several new directors to the PIC board on Wednesday. Most of the PIC's previous board resigned dramatically in February but agreed to stay on until an interim board was appointed.
On Friday, Mkhwanazi said the previous board had been divided and failed to agree on how to proceed with allegations against Matjila, who over the past year has denied allegations of impropriety and governance breaches in the handling of investments.
The PIC invests about R2-trillion in government employee pensions. This pot of funds made the PIC vulnerable to political interference.
"The elephant in the room was the CEO, so that is out of the way ... I hope this will be a normal year," Mkhwanazi told Business Times. Asked what the board should prioritise, he said: "I suppose as the interim board you have to look at the strategy of the previous board."
Mkhwanazi said his reappointment was Mboweni's decision. "I'm OK with it. I was only there five minutes [speaking of his previous appointment to the board] and all hell broke loose."
He is one of two former board directors Matjila named while testifying at the commission of inquiry into governance at the PIC this week. Matjila claimed former finance minister Malusi Gigaba hand-picked Mkhwanazi and Mathukana Makoka as nonexecutive directors in 2017, without following due process.
A statement from the National Treasury this week said Pitsi Moloto was also returned as a board member. Corporate heavyweights Maria Ramos, Reuel Khoza, Sindi Mabaso-Koyana and Irene Charnley are new board members. They are joined by Tshepiso Moahloli, Barbara Watson, Ivan Fredericks, Zola Saphetha, Bhekithemba Gamedze, Angelo David Sabelo de Bruin, Bonke Dumisa and Makhubalo Ndaba. Mugwena Maluleke, the general secretary of the South African Democratic Teachers Union, is the 15th member. The board's term started on Friday and expires on July 31 2020.
Ivor Sarakinsky, a professor at the Wits School of Governance, said the new board's priorities included identifying and clearly defining the shareholders as pensioners and current investors in the fund, and to "institutionalise their rights".
"Once the board has done that they need to insulate themselves from political interference - they need to do that by taking the PIC outside of a direct political structure."
They could set up a special purpose vehicle to manage the fund, which would report to the portfolio committee on public service and administration or Treasury or both.
Another priority could be to stipulate that the PIC's investments are for the benefit of future pensioners or for the wellbeing of the country in terms of funding infrastructure and other projects.
Sarakinsky said the creation of an interim board was problematic in that "it forces them to make short- to medium-term decisions and avoid the difficult, maybe longer-term, decisions because they are not there long enough. The idea of an interim board institutionalises uncertainty."
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