Deputy Finance Minister Dr David Masondo has resigned as the chairperson of the Public Investment Corporation.
Image: Timothy Bernard / Independent Newspapers
The DA said the resignation of Finance Deputy Minister David Masondo as Public Investment Corporation (PIC) board chairperson was not enough to restore confidence in the institution entrusted with managing over R3 trillion of government employee pension savings and workers’ funds.
The party’s deputy spokesperson on appropriations, Andrew Bateman, said on Friday the PIC had descended into an unprecedented governance crisis that signalled a resounding breakdown in corporate governance.
“New directors will be required to chart a difficult course to restore confidence, but changing the board without changing the law will not fix the PIC,” Bateman said.
He made the statement after Masondo resigned on Thursday ahead of Monday’s general meeting called by Finance Minister Enoch Godongwana, where the vote on the removal of nine non-executive directors from the board was expected.
Masondo’s resignation followed the precautionary suspension of CEO Patrick Dlamini pending an investigation into allegations by a whistle-blower, the resignation of six non-executive directors, and an investigation by the Financial Sector Conduct Authority.
In his resignation letter, Masondo said he resigned to help restore stability to the PIC after the period of instability that followed the board's appointment eight months ago.
“My hope is that this decision will allow the institution to move forward with renewed focus and confidence.”
Masondo also said in a statement that his decision was in the interest of South Africa, the continued stability of the PIC, and the confidence of the millions of South Africans whose savings are entrusted to this institution.
“As board chair, I served at the pleasure of the shareholder minister, whose powers are prescribed by law and must be exercised with due care, diligence, and in accordance with the law.”
He also said the board discharged its responsibilities faithfully and placed the institution above oneself.
“It is therefore prudent that I step aside to avoid any uncertainty or distraction that could affect the stability of the PIC or undermine confidence in its work.”
Masondo was hopeful that the outstanding matters the board was dealing with, including the whistle-blower report, the allegations against the CEO, the Acapulco matter, which he referred to the Special Investigating Unit, and other related issues, would be thoroughly investigated and appropriately addressed, rather than being swept under the carpet.
“More importantly, I trust that the governance and investment reforms, particularly in the unlisted portfolio, initiated by the previous board, together with the filling of critical vacancies, are addressed and pursued with the urgency they deserve,” he said.
However, Bateman said the governance framework that allowed the crisis to develop at the PIC must be reformed.
“If we fail to address the causes of the PIC’s institutional decay, South Africa will relive the same crisis every few years. That is precisely why the DA has introduced the Pension Protection Bill, which has already been submitted to Parliament's legal services.”
Bateman also said the short-term priorities were to stabilise the PIC, appoint a credible and suitably qualified board, and ensure that ongoing investigations are allowed to proceed without interference.
“Regaining public trust will also demand full transparency in respect of the implementation of the Mpati recommendations and the PIC’s unlisted ‘Isibaya’ portfolio. The most strategic intervention that is required, however, is to implement the structural reforms that are needed to prevent another governance crisis in the future.”
Standing Committee on Finance Chairperson Joe Maswanganyi noted Masondo’s resignation, saying he recognised his contribution to strengthening governance and oversight at the PIC.
Maswanganyi called on Godongwana to ensure governance stability at the PIC by putting in place appropriate interim governance arrangements where necessary.
“The committee will pay close attention to developments as we continue to exercise our oversight over the governance and operations of the PIC to ensure that it remains a well-governed, accountable, and financially sound institution that discharges its fiduciary responsibilities with integrity and in the public interest,” Maswanganyi said.