PARLIAMENT’S standing committee on public accounts (Scopa) is preparing to call the Public Investment Corporation (PIC) to a “full and considered hearing” into whatever might be wrong at Africa’s largest asset manager.
Scopa chairperson Themba Godi said yesterday “the stream of negative reports” about the PIC could not be ignored.
Last week Godi wrote to PIC chairperson and Deputy Finance Minister Mondl Gungubele “indicating our concerns about these negative reports and requested documents about the PIC. We are waiting on his reply”.
Godi said once an institution started to suspend officials for flimsy reasons, and made multimillion-rand payments to employees, it noised suspicions about issues of governance and accountability.
Godi made these remarks as DA MP David Maynier said he wanted Scopa to investigate allegations that Cooperative Governance and Traditional Affairs Minister Zweli Mkhize had received a R4.5m kickback in return for facilitating a R210m loan for Afric Oil from the PIC. Mkhize has denied the allegations. Scopa said the PIC manages close to R2 trillion and has a major role to play in the country’s economic growth, transformation and job creation goals.
“It is therefore inevitable that the PIC is a highly contested space for political, economic and other reasons,” it said.
Prof Jannie Rossouw, head of the School of Economic and Business Sciences at Wits University, endorsed the call for an investigation yesterday.
“The PIC plays an important role in investing public and pension funds and must make sure all spending meets good governance criteria.”
But not all pressure groups and economists believe an inquiry will be useful.
Political economist Semoadi Semoadi said issues of policy surrounding the Reserve Bank, Treasury and the PIC was a sad story.
“The black-led government has failed to introduce changes to these key institutions and enormous power still vests in them. The PIC is designed to benefit rich people at the expense of blacks,” he said. He said policies of the PIC had been supporting the old economic structure.
“All the money that is coming from the PIC helps white companies listed on the JSE, even companies from abroad. In other instances, the PIC is chasing poor investments that have no return,” he said.
He said the PIC, since its launch in 1911, was designed to benefit rich people and was not lining up resources to transform blacks.
“A commission of inquiry will not solve anything. The issues involving the PIC are structural. White monopoly capital is still a big elephant in the room. For example, Pick n Pay can get money from the PIC but its suppliers are not blacks,” he said.
He stressed that massive BEE deals were set up to collapse, given the “modus operandi” of the PIC.
The Association for Monitoring and Advocacy of Government Pensions president, Adamus Stemmet, said although it was difficult to prove corruption at PIC, the reality is that pensioners were worried.
Stemmet said state-owned entities owed the PIC an estimated R200bn and were all unable to pay. “The Minister of Finance must appoint an inquiry. We suggested this many times,” he said.
Trade union federations Cosatu and Saftu declined to comment.
The Government Employees Pension Fund on whose behalf the PIC invests, did not respond to enquiries about governance of the PIC.
The PIC said yesterday that weekend reports on some of its investments were malicious and patently false.
It said its transactions were approved by a fund investment panel comprising independent non-executive directors of the PIC board. The panel is a subcommittee of the PIC board’s investment committee.
“The PIC’s investment processes are such that no one person, in particular the PIC CEO, is vested with all the powers to unilaterally make investment decisions,” the PIC said.
The PIC rejected claims that it was designed to cater for whites.
At the time of going to press, the national Treasury had not responded to questions.
BERNARD SATHEKGE AND DENNIS CRUYWAGEN email@example.com