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
South Africa should not misunderstand the present turmoil at the Public Investment Corporation. The suspension of a chief executive, the resignation of directors, contested transactions and regulatory scrutiny are not isolated headlines. They are symptoms of a deeper national question: what must the PIC be, whom must it serve, and how should the power of workers’ capital be exercised?
The PIC’s roots reach back to the Public Debt Commissioners established in 1911. It evolved from a conservative custodian of government funds into Africa’s largest asset manager, responsible for more than R3 trillion across listed investments, bonds, property and developmental portfolios. Behind every figure are teachers, nurses, police officers and public servants whose savings represent sacrifice, work and deferred hope.
After 1994, the PIC could no longer remain merely a passive keeper of accumulated wealth. Democratic South Africa required capital to participate in reconstruction, transformation and shared prosperity. Through vehicles including the Isibaya Fund, the PIC sought financial returns alongside job creation, empowerment, infrastructure development and inclusive growth. Apartheid had concentrated ownership, opportunity and productive assets. A democratic state could not be neutral about that inheritance.
But developmental purpose does not cancel fiduciary discipline. It makes discipline more important.
The PIC sits at a difficult intersection. It must safeguard pensions and earn sustainable returns. It must invest through economic cycles. It must support transformation and build productive capacity. It must remain responsive to national development while resisting political pressure, patronage and connected interests.
That contradiction has repeatedly exposed the PIC to danger. Its scale attracts entrepreneurs and nation builders, but also influence merchants, political networks, advisers and dealmakers who understand the value of proximity to public capital. Transformation language can advance genuine redistribution or conceal weak transactions, inflated valuations and private extraction.
The Mpati Commission was therefore not merely an inquiry into questionable investments. It was a warning about institutional culture, decision making, governance, whistleblowing, concentration of authority and the vulnerability of unlisted investments. Its central lesson was that public capital cannot depend on the presumed goodness of individuals. It requires systems strong enough to withstand ambition, pressure, error and capture.
The Acapulco matter illustrates why. The PIC reportedly advanced R333.2 million to finance a stake in Lanseria International Airport. After default, its exposure grew. Valuations shifted dramatically, and the PIC ultimately paid more than R400 million after arbitration. The legal process may explain the obligation to pay, but it cannot end the inquiry. South Africans are entitled to know whether the original investment, security, valuation process, professional advice, litigation strategy and oversight protected public value.
This should not become another personalised battle in which one faction proclaims reform and another claims persecution. The standard must be consistent: investigate the investment, test the suspension process, examine the board and executive, protect whistleblowers, establish whether interference occurred, and let verified evidence determine responsibility.
The larger danger is that repeated controversy produces one of two destructive responses. The first is developmental paralysis: officials become too frightened to invest in anything innovative, transformative or difficult. The second is developmental recklessness: almost any transaction is justified by invoking empowerment, jobs or national interest.
A mature developmental investor must be courageous enough to take calculated risks and disciplined enough to reject economically unsound proposals. It must distinguish between transferring shares and transforming productive capacity; between saving a connected business and building a strategic industry; between announcing jobs and creating sustainable work; between claiming impact and measuring it.
The PIC must now manifest a clearer institutional identity.
It must be the guardian of workers’ deferred wages before it is anything else. It must be a patient investor in South Africa’s productive future. It must finance infrastructure that expands economic capacity; affordable housing and student accommodation that restore dignity; industrial and technological ventures that create capabilities; agriculture that strengthens food security; renewable energy and transmission that power development; and black-owned enterprises that can compete, grow and endure.
It must crowd in private capital without socialising private failure. It must back entrepreneurs without financing entitlement. It must support the state’s developmental objectives without becoming an instrument of political direction. It must use its shareholder power to demand ethical leadership, fair labour practices, climate responsibility and long-term value from investee companies.
Every developmental investment should answer five questions:
The PIC must also become a learning institution. Failed investments should generate disclosed lessons, stronger controls and changed practice. External advisers must be challenged, not worshipped. Large valuation movements must trigger independent review. Investment committees must record dissent. Whistleblowers must be protected. Consequence management must reach senior decision makers and professional service providers, not only junior officials.
South Africa does not need a timid PIC, a captured PIC or a PIC consumed by internal warfare. It needs a competent developmental investor.
The PIC must invest boldly, govern ruthlessly, disclose honestly, learn continuously and act as the custodian of workers’ trust.Its success will not be measured only by assets under management or annual returns. It will be measured by whether those assets helped build a productive economy, an equal society and a secure future.
That is what the PIC must manifest.
That is what the PIC must become.
That is what South Africa must insist it will be.
* Faiez Jacobs is a governance adviser, former Member of Parliament, founder of The Transcendence Group, Capetonian, activist and servant of the people.
** The views expressed do not necessarily reflect the views of IOL.