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Public Investment Corporation manager quits as scandals mount

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Africa’s largest fund manager is the subject of an ongoing inquiry into various investment decisions, including in the bonds of Eskom Holdings and technology company Ayo Technology Solutions.

Sunday 03, February 2019

(Bloomberg) --The Public Investment Corporation’s (PIC) board of directors offered to resign amid an inquiry into allegations of wrongdoing, throwing the South African manager of more than ZAR 2 trillion ($150 billion) deeper into crisis.

The institution responsible for most South African government worker pension funds has been “destabilised” by a series of claims, including against at least four board members, Chairman Mondli Gungubele said in a letter to Finance Minister Tito Mboweni co-signed by eight other executives. “Our assessment is that this may not be the end,” they said, adding that they are prepared to stay on until a new board is appointed.

In the past year, half of the PIC’s executive committee have been suspended or resigned, including ex-Chief Executive Officer Daniel Matjila.

“These events have been unbearable to us as individuals and have undoubtedly had a negative impact on our professional integrity,” the board members said. They are “an attempt to bring the institution into a state of paralysis.”

The PIC, which invests government pension and other social funds, on Wednesday said it’s immediately starting a forensic investigation into allegations of impropriety made by an anonymous whistle-blower against three board members. The accusations come at the same time as a separate inquiry into South African government graft, shining a spotlight on the depth of corruption in the country.

The PIC inquiry was told this week by a former board member that the money manager would be better off without the country’s deputy finance minister, in this case Gungubele, chairing its board because it inadvertently exposes the continent’s biggest money manager to the perception of political interference.

Furthermore, another suspended employee this week said the institution has a culture of intimidation and coercion and the people who write investment reports often have no control of the valuations and recommendations contained in them.

 

TAGS : Tito Mboweni, Public Investment Corporation

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