New PIC board marks ‘crucial step in restoring stability’

The embattled Public Investment Corporation (PIC) said the appointment of a new board marked a crucial step towards restoring corporate governance and institutional stability at the asset manager, which oversees more than R3.6-trillion in assets.

Acting chief executive Batandwa Damoyi said the expertise and collective experience of the incoming board would strengthen the PIC’s commitment to accountability, transparency and responsible investment.

In a media briefing on Thursday to announce the outcomes of the cabinet meeting held on Wednesday, minister in the Presidency Khumbudzo Ntshavheni announced deputy minister of planning, monitoring and evaluation Seiso Mohai as chair of the PIC board.

The new nonexecutive members are:

• Mohai (chair);
• Patience Nqeto;
• Lebogang Mokgabudi;
• Gatlelane Ouma Rasethaba;
• Vivien McMenamin;
• Bajabulile Swazi Tshabalala;
• Itani Mafune; and
• Moipone Ramoipone as the Treasury representative.

“The appointment is aimed at addressing current governance challenges. The minister of finance [Enoch Godongwana] will continue to drive the reforms of the PIC as recommended by the judge Mpati commission in consultation with cabinet,” Ntshavheni said.

Damoyi said the PIC appreciated that Godongwana and the cabinet moved with urgency to get a new board in place “that will bring much-needed stability to the organisation.

“The PIC management team is ready to welcome new board members, and we are committed to work constructively with the board to rebuild public trust and provide assurance to all PIC clients that their retirement savings and social security funds continue to show robust growth.

“The immediate priority is to ensure a seamless induction process for all new board members, so that the board can begin its oversight duties without delay,” she said.

The board appointments came at a critical time, Damoyi said. “The corporation recognises the role a well-functioning board plays in sound governance, effective oversight and the prudent stewardship of assets under management, on behalf of the PIC’s clients.”

The board members have the following backgrounds:

• Nqeto is a business executive and corporate governance specialist;
• Mokgabudi is an investment professional;
• Rasethaba is an advocate with expertise in commercial, constitutional and administrative law;
• McMenamin is a senior business executive with extensive experience in banking, financial services and corporate governance.
• Tshabalala is an economist with extensive experience in development finance and investment;
• Mafune is a business executive with experience in finance and investment management; and
• Ramoipone is the chief director at the National Treasury.

The appointments follow a wave of resignations that exposed deep governance challenges at the corporation.

Business Day reported that deputy finance minister David Masondo resigned as the PIC chair last week, days before a board meeting that Business Day understands was going to result in the board being dissolved.

His resignation is the latest development in a governance crisis over recent months that has engulfed Africa’s largest fund manager. The FSCA financial regulator sent a sharply worded letter to the board over governance failures and nondisclosure of a whistle-blower report.

We urge the president [Cyril Ramaphosa] to task the Special Investigating Unit, the auditor-general and the Hawks to institute a comprehensive investigation of all PIC investments to ensure the cancer of corruption and state capture is fully exorcised from the PIC

—  Matthew Parks, Cosatu parliamentary coordinator

Nonexecutive directors — Dorothy Kobe, Lerato Makwetla, Lindy Bodewig and Mpumelelo Maseko — resigned from the PIC, bringing to six the number of non-executive directors to quit the asset manager in a week.

The resignations were viewed as piling pressure on Godongwana to intervene urgently amid a deepening leadership vacuum that left the company without a permanent CEO or chief investment officer (CIO).

The root cause traces to a power struggle between Masondo and suspended CEO Patrick Dlamini, whose restructuring of the CIO role and cleanup of the troubled unlisted portfolio reportedly clashed with Masondo. This was compounded by the fallout from a PwC report criticising the roughly R400m Acapulco payout tied to the Lanseria Airport deal and separate value destruction from a R2bn investment in property group Grit.

Cosatu parliamentary coordinator Matthew Parks said the new board would provide “badly needed authority and stability to the PIC, the largest investment fund in South Africa and the continent. [Mohai] brings decades of leadership, tertiary qualifications and most importantly, a record of standing up to state capture and corruption, irrespective of the personal cost to himself.

“Mohai played an instrumental role in ensuring the fifth parliament adopted the PIC Amendment Act in 2019, against massive covert and overt resistance from many vested and powerful state capture interests. The PIC Amendment Act, acting upon demands from Cosatu, workers, pensioners and the recommendations of the judge Lex Mpati commission of enquiry into the PIC, introduced some of the most comprehensive anti-corruption and transparency legislative amendments,” Parks said.

“The federation will similarly insist that the PIC continue all investigations instituted by the previous board into alleged corruption and state capture. We urge the president [Cyril Ramaphosa] to task the Special Investigating Unit, the auditor-general and the Hawks to institute a comprehensive investigation of all PIC investments to ensure the cancer of corruption and state capture is fully exorcised from the PIC.

“The federation will insist that any proposed legislative amendments strengthen the 2019 Amendment Act’s landmark anti-corruption, transparency, accountability and developmental provisions. We will never allow these historic, progressive and anti-corruption provisions to be reversed or watered down.” — With Kabelo Khumalo and Thando Maeko.

Business Day