Inquiry issues damning report on South African state asset manager

A judicial inquiry into South Africa’s state asset manager found major impropriety, bad governance and victimisation of staff, its report to President Cyril Ramaphosa showed on Thursday.

The findings are a blow to the reputation of the Public Investment Corporation (PIC), one of Africa’s largest fund managers which oversees more than R2 trillion ($120.9 billion) of investments on behalf of clients including the Government Employees Pension Fund.

Ramaphosa’s office said the inquiry’s report required the urgent attention of the criminal justice system, finance ministry and PIC board of directors.

“There has been substantial impropriety at the PIC, poor and ineffective governance, inadequate oversight, confusion regarding the role and function of the Board and its various sub-committees, victimisation of employees and a disregard for due process,” the inquiry’s report read.

“There are clear instances where the Commission found that directors and/or employees benefited unduly from the positions of trust that they held.”

A PIC spokesman could not immediately comment on the inquiry’s findings.

Ramaphosa appointed the inquiry into the PIC in 2018 after opposition parties accused executives including former Chief Executive Dan Matjila of misusing funds and making careless investment decisions.

Matjila denied the allegations against him, but he was suspended and resigned soon after the inquiry was set up. He was not available for comment on Thursday.

The state-owned PIC holds large stakes in blue-chip companies on the Johannesburg Stock Exchange and bonds of prominent state firms like struggling power utility Eskom. It also holds a large portfolio of real estate and unlisted investments.

“The PIC must recover all the monies utilised in irregular transactions or unlawfully paid out,” Ramaphosa was quoted as saying in a statement.

“Potential criminal behaviour has also been highlighted, which should be followed up by law enforcement agencies.”