The South Africa Federation of Trade Unions welcomes the President’s announcement that the promised judicial inquiry into the Public Investment Corporation (PIC), will be headed by retired judge Lex Mpati, the former president of the Supreme Court of Appeal. He will be assisted by former South African Reserve Bank governor Gill Marcus and investment banker and asset manager Emmanuel Lediga.
SAFTU has already expressed its concern about serious allegations of the looting of the PIC allegedly by private individuals. The inquiry must be truly independent and non-partisan and if It reveals that anyone is guilty then they must face the consequences.
SAFTU is already working with lawyers to get to the bottom of these allegations.
We demand that Dr Matjila and the Board be placed on leave, that the suspensions of the executives be lifted and those who took golden handshakes be asked to testify to the inquiry. In addition the inquiry must ensure that whistle blowers will not be victimised if they come forward.
The federation also welcomes the fact the Inquiry’s terms of reference extend beyond matters of governance only to an instruction to to probe various controversial transactions that took place in 2017 and 2018 and to probe whether the PIC has adequate measures in place to ensure that investments do not unduly “favour or discriminate against” prominent influential people, their immediate family members or known associates.
It should look into the PIC’s private placement of R4.3bn in initial public offering of Iqbal Serve’s Ayo Technologies last December at a price that was regarded by the market as grossly overvalued; the PIC’s subsequent enthusiasm to invest in Survé’s Sagarmantha, which did not go ahead; and its investment in the S&S Oil refinery in Mozambique in which the son of former finance minister Nhlahla Nene was involved.
The PIC, which manages R2-trillion in government pension and other funds, is the largest asset manager on the continent. This is workers’ money, and must therefore be invested both to provide security to those whose pension and provident money the PIC manages, and also to play a key role in development our country by setting aside a percentage of the funds to be invested in government bonds that are dedicated to, for example, building infrastructure in residential areas where workers reside.
Currently the fund managers interpret the “maximum return mandate” too narrowly to mean money can only be borrowed to mega projects in the city centres to build more glass-fronted buildings. This then leads to the deepening of inequality in society.
SAFTU also calls for the PIC to be made more democratic and accountable, so that the employees have representatives to take decisions on how their money should be invested and mandate the PIC officials to implement these policies.