PIC’s new board to be headed by deputy finance minister

Deputy finance minister, David Masondo will be taking up the reigns as the Public Investment Corporation’s (PIC) new board chairperson effective immediately, igniting fears that the move may open the door for political interference.

The appointment of the new board comes after the term of the interim board – which was appointed in July 2019 by finance minister at the time, Tito Mboweni’s, administration – came to an end on Sunday, October 31.

Read: The PIC’s interim board bows out with a whimper

“The PIC looks forward to working with the new board to ensure that the investment objectives of its clients are realised and that good corporate governance, ethical conduct and institutional integrity are further entrenched in the institution,” the PIC said in a statement.

The PIC has about R2.3 trillion worth of assets under management, making it the largest asset management company in Africa. It mainly oversees the pensions of government workers, which account for 89.24% of the PIC’s assets under management.

Masondo will be taking over from acclaimed businessman, Dr Reuel Khoza, who was effectively tasked with leading the board in its efforts to restore the PIC after it was embroiled in allegations of misconduct and breaches of corporate governance.

Back to square one

During Mboweni’s tenure, the former finance minister appointed the PIC’s first independent chairperson in Khoza. Mboweni believed that this move would not only bring stability to the embattled state-owned enterprise (SOE) but it would also limit political interference.

Before Khoza’s appointment, it was tradition to appoint the deputy finance minister to serve on the board in the chairperson position as shareholder representative.

Read:  PIC board “fully autonomous”

The Mpati Commission of inquiry into allegations of impropriety at the PIC, which was chaired by Judge Lex Mpati, found similarly that the frequent changes to the board chair position at the PIC played a role in the asset manager’s governance issues.

However, even after the commission’s findings and Mboweni’s attempts to autonomise the SOE, the PIC Amendment Act could potentially reverse the gains the interim board has made to stabilise the ship.

The act, which President Cyril Ramaphosa effected in February, legalises the age-old practice (and some might say the source of some of the SOE’s problems) of having the deputy finance minister as the board chair.

Read: PIC inquiry: Corruption or sheer incompetence?

The rest of the team

Masondo will be leading a team of the following board members;

• Frans Baleni
• Ntombifuthi Mtoba
• Tryphosa Ramano
• Bonke Dumisa
• Esther Barbara Watson
• Beverly Bouwer
• Mongwena Mugwena Maluleke
• Walter Hlaise
• Lufuno Mulaudzi
• Abel Sithole
• Brian Mavuka
• Makano Mosidi