Reports suggest the PIC board will meet on Monday to discuss the recent turmoil at the pension fund manager and to consider a shareholder vote for the removal of the remaining five non-executive directors, as well as Godongwana’s deputy, David Masondo, who is the PIC chairman at present.
Image: Kopano Tlape / GCIS
Finance Minister Enoch Godongwana is contemplating a number of measures to ensure a return to stability at the Public Investment Corporation (PIC), the state-owned company that manages some R3.6 trillion of mostly government employee pension savings.
“The Minister has noted and received communication from the PIC Board and will, at an appropriate time, provide further details on the measures he is contemplating as the PIC’s shareholder. The Minister will not be commenting further on issues at the PIC in public,” Godongwana’s office said in response to Business Report questions on Wednesday.
Reports suggest the PIC board will meet on Monday to discuss the recent turmoil at the pension fund manager and to consider a shareholder vote for the removal of the remaining five non-executive directors, as well as Godongwana’s deputy, David Masondo, who is the PIC chairman at present.
The PIC put its chief executive, Patrick Dlamini, on precautionary suspension last week amid growing uncertainty about governance at the institution, and so that Dlamini can objectively face allegations levelled against him by a whistleblower in relation to R411 million BEE finance provided to Acapulco for a stake in Lanseria Airport more than a decade ago, and the subsequent arbitration award made by the PIC in relation to this financing.
The referral of the Acapulco matter to the SIU (Special Investigating Unit) and the Financial Services Conduct Authority’s (FSCA) plan to investigate the PIC following Dlamini’s suspension has reportedly resulted in the resignation of four PIC directors on Tuesday, while two had resigned a week before, days after the suspension.
Masondo had, in June, outlined some of the problems that the PIC had in the BEE financing of Lanseria Airport. Acapulco’s ability to repay the PIC was dependent on dividends from Lanseria Airport, but Lanseria did not declare dividends for close to a decade. As a result, the loan remained unpaid and eventually defaulted.
No company is under any obligation to declare dividends to any shareholder. Masondo said that had transactions on BEE structures such as Acapulco required regular interest servicing from the outset, warning signs would likely have emerged far earlier, enabling timely intervention and recovery.
Instead, dividend-dependent BEE financing structures often delayed the recognition of distress and complicated recovery efforts, he said.
The four directors who resigned on Tuesday are believed to be Lerato Makwetla, a Government Employees Pension Fund representative; Lindy Bodewig, a representative of National Treasury; Mpumelo Maseko, the former head of the PIC’s Isibaya Fund; and Dorothy Kobe, formerly at the Land Bank.
The two earlier non-executive resignations were Thabi Nkosi, an agricultural economist and Nosiphiwo Balfour, a property and investment executiv.
BUSINESS REPORT