The Democratic Alliance has called for urgent parliamentary hearings after the Public Investment Corporation suspended its chief executive and acting chief investment officer amid a growing governance crisis.
Image: IOL / File
The Democratic Alliance (DA) has called for urgent parliamentary intervention following the precautionary suspension of Public Investment Corporation (PIC) chief executive Patrick Dlamini and acting chief investment officer August van Heerden, warning that South Africans' pension savings could be placed at risk if governance concerns are not addressed.
The PIC board confirmed on Monday that Dlamini had been placed on precautionary suspension in line with the corporation's whistleblower policy while allegations of impropriety against him are investigated.
The board stressed that the suspension does not amount to a finding of wrongdoing and is intended to ensure a fair, objective and independent investigation.
"The suspension does not, in any way, constitute a finding nor is it a pronouncement of any wrongdoing on the part of the CEO," the PIC said in a statement.
The board also announced that Van Heerden would cease serving as acting chief investment officer following a resolution by the Government Employees Pension Fund, the PIC's largest client.
Leon Smit, currently Head of Fixed Income in Listed Investments, has been appointed acting chief investment officer.
The PIC said Smit brings more than three decades of investment and financial markets experience to the role and has previously served as acting chief investment officer during interim periods.
"The Board remains committed to the highest standards of governance and institutional integrity," it said.
The suspensions come as the PIC continues to face scrutiny over governance issues linked to a more than decade old investment involving Lanseria Airport and allegations contained in whistleblower reports.
The state asset manager oversees approximately R3.6 trillion in assets, primarily on behalf of the Government Employees Pension Fund, making it Africa's largest pension fund manager.
Reacting to the developments, Democratic Alliance spokesperson on finance Dr Mark Burke said Parliament had failed to exercise adequate oversight of one of the country's most important financial institutions.
"The public has every right to be concerned. The ANC's David Masondo, Chairperson and Deputy Finance Minister, faces his own whistleblower allegations and a tenure marked by failed investments. Then there's the five suspended executives in the last two years," Burke said.
He criticised Parliament's Standing Committee on Finance for what he described as a lack of meaningful oversight.
"In moments of crisis, it is Parliament's constitutional duty to call officials to account. To help the nation know what's happening. It has thus far failed dismally."
Burke said the committee had not required the PIC to explain the growing conflict within its leadership and had not held an in person hearing with the institution over the past year.
"Parliament's Finance Committee has not only neglected to demand the PIC explain its boardroom fighting, it hasn't held a single in person hearing with the PIC in the past year."
He also questioned Parliament's recent recommendation supporting greater investment flexibility for the PIC.
"Bizarrely, two months ago, ANC finance MPs unanimously fought for the PIC to be allowed to spend more money on unlisted investments and for this recommendation to be included in an official report."
Burke argued that the governance issues now facing the institution demanded immediate action.
"There is no longer only smoke at the PIC, the fire is blazing. The casualties are mounting. Parliament urgently needs to call in person, in camera hearings over multiple days to hear what the board and executives tasked with investing public pension money are doing."
The governance crisis has unfolded against the backdrop of growing concerns over the PIC's unlisted investment portfolio.
Recent discussions in Parliament revealed that the asset manager had committed approximately R67 billion to around 150 unlisted investments since 2003, with at least 78 of those investments recording either partial or total losses.
The Lanseria Airport investment has emerged as one of the central issues underpinning the current dispute.
The matter has involved a whistleblower complaint against Dlamini, the publication of a confidential PwC forensic report, the referral of aspects of the case to the Special Investigating Unit by PIC chairperson and Deputy Finance Minister David Masondo, and a R900 million High Court damages claim brought by businessman Kagiso Matjila against Dlamini over the appointment of PwC to investigate the dispute.
Meanwhile, Parmi Natesan, CEO of the Institute of Directors South Africa (IoDSA) told Business Report on Tuesday that a precautionary suspension should not be viewed as a finding of guilt, but it does raise important governance considerations.
"For an institution entrusted with managing significant public funds, the board should ensure continuity of leadership, effective delegation of authority, robust risk management and clear accountability. Equally important is maintaining stakeholder confidence by demonstrating that governance processes are being followed objectively, fairly and without undue delay," Natesan said.
Natesan added that the board should ensure that the investigation is conducted independently, in accordance with due process and the principles of procedural fairness.
"It should oversee, but not interfere in, the investigation, ensure appropriate interim leadership arrangements are in place, and communicate with stakeholders in a manner that is transparent while respecting legal and confidentiality obligations. King V emphasises that governing bodies should balance transparency with fairness and act in the best interests of the organisation," Natesan said.
"One of the key lessons is that good governance is tested during periods of uncertainty. Boards should ensure that succession planning, crisis management, ethical leadership and independent oversight are well established before issues arise. Strong governance frameworks help organisations respond consistently and maintain public trust," Natesan said.
Finance Minister Enoch Godongwana has also recently met with the PIC board as concerns mounted over the Lanseria investment and the broader performance of the corporation's unlisted investment portfolio.
The outcome of the investigation into the allegations against Dlamini and the ongoing governance issues is expected to be closely watched by investors, government and pension fund members alike, given the PIC's central role in managing South Africa's public sector retirement savings.
Follow Business Report on Facebook, X and on LinkedIn for the latest Business and tech news.