The Public Investment Corporation (PIC) faces mounting scrutiny as recent boardroom crises expose its inability to properly adopt vital Mpati Commission reforms.
Image: IOL / File
The Public Investment Corporation is under scrutiny as its failure to implement key Mpati Commission recommendations is exposed, amid fresh institutional instability.
This after the Public Servants Association (PSA) demanded that Finance Minister Enoch Godongwana tell the public how far the institution has come in applying the Mpati Commission’s recommendations.
Godongwana had previously insisted that all recommendations were fully completed and that past operational and ethical deficiencies had been rectified.
Recently, non-executive directors Thabi Nkosi and Nosiphiwo Balfour have resigned from the PIC.
These resignations come in the wake of a governance crisis at the PIC triggered by the precautionary suspension of CEO Patrick Dlamini and subsequent intervention by the Financial Sector Conduct Authority (FSCA), which launched an investigation into the PIC due to rising concerns over governance, leadership stability and transparency.
The PSA said "the continued suspension of senior executives, the resignation of board members, and persistent questions regarding governance suggest that the institutional reforms envisaged by the Mpati Commission have not been adequately embedded in the PIC."
The PIC board placed Dlamini on precautionary suspension over a controversial R500 million payout regarding the Lanseria Airport and a forensic investigation launched without board approval. Chief Financial Officer, Batandwa Damayi, has since been announced as acting CEO.
This followed a whistle-blower report submitted last month, which accused Dlamini of unethical conduct and governance failures.
The suspension occurred right after a clash within the National Treasury.
Finance Minister Enoch Godongwana had previously stepped in to demand a formal, process-oriented review by internal auditors rather than an immediate suspension. However, the PIC board, chaired by Deputy Finance Minister David Masondo, bypassed this and enforced the suspension anyway, exposing a significant political rift.
The PSA said the latest developments are indicative of deeper systemic governance failures that require urgent and decisive intervention to restore confidence in the governance, oversight and strategic direction of the PIC.
The union said the current instability further raised the fundamental question of why key governance recommendations by the Mpati Commission were not fully implemented.
“The commission made several recommendations aimed at strengthening governance, improving transparency, depoliticising board appointments, tightening investment oversight, and ensuring that the PIC acts solely in the best interests of its clients and beneficiaries. Had these recommendations been implemented in full and without delay, many of the governance failures that continue to emerge could have been prevented or significantly mitigated.”
“The PSA therefore urges the Minister of Finance to publicly account for the status of the implementation of the Mpati Commission's recommendations. Public servants whose pension savings are entrusted to the PIC through the Government Employees Pension Fund require assurance the commission’s recommendations have translated into tangible, meaningful institutional reform,” said the PSA.
Key recommendations from the Mpati Commission, including PIC governance reforms and the appointment of an independent chairperson, have not been implemented. Furthermore, proposals for an independent Office of Public Integrity and government-wide lifestyle audits, remain unfulfilled.
The National Treasury did not respond to a request for comment by deadline.
Masondo also exposed structural divisions and governance failures within the state-owned asset manager after discovering the board was kept in the dark about an FSCA document request regarding the whistleblower, revealing a critical communication gap between PIC management and the financial regulator.
He revealed this when addressing a town hall meeting on Thursday to reassure employees that the entity remains operationally stable, amid a governance crisis.
He said upon becoming aware through subsequent correspondence, he immediately responded and furnished the requested documentation.
Masondo also told employees that the board sought and received independent legal advice from senior counsel before taking its decision to suspend Dlamini.
Political analyst Zakhele Ndlovu said the problems at the PIC are a microcosm of the problems in society, adding that the continued deployment of the well-connected and a well established patronage system are blocking the full execution of the Mpati Commission’s findings.
Meanwhile, the DA said the PIC claim that recommendations of the Mpati Commission have been fully implemented, is false.
The party said Masondo should be the last politician to serve as Chairperson of the PIC board and should be replaced with an independent person as soon as possible, as the commission recommended that the Deputy Finance Minister should no longer automatically serve as PIC chairperson.
* An earlier version of this story, incorrectly stated that the PSA had confirmed the resignation of Matimba Justice Shiburi (the board representative for the PSA) from the PIC board. Shiburi in fact, is still a PIC board member.
*The error is regretted and we apologise unreservedly to the PSA and Shiburi for any inconvenience caused.
* The PSA's response:
"Mr Shiburi has not resigned as a member of the PIC Board. He remains a duly appointed Board member and continues to discharge his responsibilities in accordance with his fiduciary duties. Mr Matimba Shiburi remains a serving member of the PIC Board and continues to perform his duties in that capacity. Any suggestion that he has resigned is false."
Cape Times