Nene institutes inquiry into PIC governance issues

Finance minister Nhlanhla Nene has instituted an independent inquiry into the affairs of the Public Investment Corporation (PIC), as the money manager has come increasingly under scrutiny over governance issues.

In a statement on Wednesday, the National Treasury also announced that Nene has instructed the PIC board to start a forensic investigation into allegations against certain PIC executives.

The PIC, which manages R2 trillion worth of investments on behalf of the Government Employees Pension Fund and other government funds, has been criticised for its governance and investment processes – particularly its questionable investments in VBS Mutual Bank and Ayo Technology, the brainchild of Dr Iqbal Survé.

In a statement released on Monday, Nene said he would announce “decisive steps” to be taken to address governance issues at the PIC and the fate of its CEO Dan Matjila.

“I believe that the measures I will announce this week will ultimately strengthen the PIC’s governance and restore public trust in this important public institution,” Nene said at the time.

The National Treasury statement on Wednesday only announced the institution of an independent inquiry and forensic investigation into PIC executives, but made no mention of Matjila’s fate.

Treasury said on Wednesday that Nene met and informed the PIC board of the next steps “in dealing with the governance issues at the state-owned fund manager and the allegations against certain PIC executives”.

“Further details on the independent inquiry, including the name of its head as well as its terms of reference, will be announced in due course,” it said.

One of the governance issues relates to the PIC’s investment into VBS, the bank that was placed under curatorship in March by the Reserve Bank amid widespread theft at the bank by board members and senior executives. The PIC owns 25.26% of VBS and had two shareholder representatives on its board.

The PIC’s executive head for legal counsel, governance and compliance, Ernest Nesane, resigned with immediate effect this month over the VBS scandal.

The PIC paid R4.3 billion to clinch a 29% stake in Ayo Technology Solutions during an initial public offering in December 2017, allegedly without following due processes.

More recently United Democratic Movement president Bantu Holomisa has accused Matjila of personally releasing funding worth R2 billion without approval from the PIC’s board, over an unspecified period, to three prominent businessmen Tshepo Mahloele, Jabu Moleketi and Warren Wheatley.

In June, Holomisa filed a lawsuit at the North Gauteng High Court, demanding that Nene suspend Matjila from the PIC.