Suspended Government Employees Pension Fund (GEPF) principal executive officer John Oliphant is set to appear before a disciplinary hearing this week for as-yet undisclosed transgressions.
The Business Times said it appeared to be related to a contract with advertising agency Mojo MotherRussia, which was supposed to pitch for a series of on-off projects in print, radio and television but the contract cost apparently rose from R540 000 to R2 million.
GEPF board of trustees chairman Arthur Moloto, who is an ANC MP, reported in the state pension fund’s annual report that a forensic investigation had been mandated by his board into “possible irregularities relating to the procurement policy of GEPF”.
The annual report – for the year to March – said the investigation was ongoing “at the reporting date”.
David Ross, the DA deputy finance spokesman, said the suspension of Oliphant raised “several concerns”. He called on Moloto to appear before the standing committee on finance to explain Oliphant’s suspension.
He said the mere announcement of his suspension had tarnished his reputation. Noting that the DA had submitted a Promotion of Access to Information Act application and put several questions to Finance Minister Pravin Gordhan about the investment strategy of the GEPF, Ross asked whether the forensic investigation into supply chain management practices at the GEPF had been completed.
“Will the minister make the report available? Who will be conducting and overseeing the disciplinary process relating to the suspension of Oliphant? When will be the disciplinary process be complete.”
Ross said as the GEPF was a defined benefit fund, it meant the government as the employer must make good any deficit in the member’s pension promise. Should the GEPF’s investment performance fall short of its liability to members, the obligation was on the government “and hence taxpayers” to top up. At the moment there are more questions than answers.
African Bank
If patriotism is the last refuge of scoundrels then grand developmental ambitions must surely be the last refuge of the chronically underperforming corporate executive.
At yesterday’s presentation of African Bank Investment Limited’s (Abil’s) results for financial 2013, chief executive Leon Kirkinis referred often to how disappointed shareholders must be with the 88 percent drop in earnings. But he made considerably more references to the developmental nature of his unsecured lending business.
“You can talk about profits and return on equity until the cows come home… but we’re an organisation that believes in the development of our society… the betterment of our society.” The implication seemed to be that analysts and shareholders should look beyond the enormous destruction of value overseen by Abil management in the past two years or so.
First of all, there was the inability of Abil management to see the enormous problems in the unsecured lending market and once they saw the problems, management seemed unable to respond effectively. But Kirkinis seems to be suggesting that we should all look beyond the multibillion-rand destruction of value to the fact that so many of South Africa’s poor are able to get unsecured loans.
Between 2001 and 2011 over 50 percent of South Africans fell into living standards measure categories 1 to 4, “today it’s 25 percent”, said Kirkinis, as though access to unsecured loans was reason for the improvement. It is, of course, great that South African executives are sensitive to social and developmental issues and the ability of poorer South Africans to access credit appears generally to be useful.
But let’s not forget that executives and shareholders in the unsecured lending industry have become enormously wealthy through the provision of this service.
They have become wealthy in part because lending activity that has such easy access to garnishee orders cannot really be described as “unsecured lending”. Garnishees surely make it a very secure form of lending. page 17
Edited by Peter DeIonno. With contributions from Donwald Pressly and Ann Crotty.