Ramaphosa releases anticipated PIC report

President Cyril Ramaphosa on Thursday afternoon released the much-awaited Public Investment Corporation (PIC) report. This is an extensive investigation into allegations of impropriety and malfeasance at Africa’s R2.1 trillion fund manager.

The damning report follows a Commission of Inquiry headed by Justice Lex Mpati. The report published on the Presidency’s website makes far-reaching findings against individuals and companies involved with the PIC.

Contrary to recent media reports that Dr Dan Mtjila, former Chief Executive Officer of the PIC was exonerated, the report finds his conduct to be concerning and irregular.

The report stipulates that “In relation to a number of the transactions considered, there were contraventions of PIC Policy, processes were not followed, necessary disclosures were not made to the Board and on certain occasions, the Board was misled.”

It further says “in certain transactions, the Commission found that the Standard Operating Procedure was not followed.

“The Commission found that a number of individuals unduly benefited from the improprieties identified.”

The report highlights that “The role of Dr Matjila is concerning in terms of his one-on-one meetings with individuals who stood to be vastly enriched, undercut the objectives of the Isibaya Fund and are in contravention of the PIC’s mandate.”

The Commission report has cautioned the PIC against the enrichment of only a few individuals, repeatedly. It says that this was caused by improper due diligence and was in violation of the core mandate of the PIC to make funds available to a broad swath of South Africa’s people in the interests of development.

In respect of the controversial transaction entered into by the PIC with MMI, Matome Maponya Incorporated, the Commission found that the PIC had been overly exposed to one client.

The report says that “The Commission finds that the PIC’s decision to make cumulative investments in various transactions with a single individual has resulted in significant exposure to reputational risk and financial losses by the fund.

Further the Commission recommends that.”The Commission recommends that the Board should develop clear policies to guide the involvement of PIC employees and non-executive directors in investee companies.”

Presidency Spokesperson Khusela Diko explains the failure of the management.

“In a large measure it attributes the impropriety to a failure by management, to manage decision making in a professional and honest manner and to this end it proposes or recommends a review of the governance and operating model of the PIC, as well as a review of the legislative framework underpinning it. He has therefore directed the speedy implementation of the recommendations contained in the report and further elaborated upon in the high level road map that has been developed to take forward its implementation. He has also said that government will be forwarding to the national prosecuting agency as well as other law enforcement agencies. The recommendations and findings of the report for their consideration,” explains Diko.

In this video below we look at the PIC investments:

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