The government is set to make drastic changes to the running of the Public Investment Corporation (PIC) with an amendment that guarantees unions at least two places on the fund manager’s board.
Today Business Report can reveal that a draft bill on the board was passed by the legislators last month and is now waiting for President Cyril Ramaphosa’s signature before it comes into effect.
The draft bill makes sweeping changes to ensure transparency and greater worker participation. It says the finance minister must, in consultation with the cabinet, determine and appoint the 10 non-executive members and the PIC chief executive and chief financial officer as executive members.
The bill says the 10 non-executive members must include a representative of the National Treasury, a representative of each major depositor and two or more, but not more than three representatives of a registered trade union, whose members are the majority of the members of the Government Employees Pension Fund (GEPF).
It says union representatives will be selected at the Public Service Co-ordinating Bargaining Council based upon their proportional composition. Fedusa general secretary Dennis George said the changes to the act were long overdue.
He said the new measures would give workers a say in how their pension funds were invested.
“Workers are the biggest investors on the JSE. The inclusion of workers on the board was the first phase. The second phase will be to use the PIC to transform the economy from monopoly of white companies to black hands,” George said.
“The PIC must go out to support beneficiation and job creation and reduce the financial burden on workers.”
The PIC is the biggest investor in South Africa’s economy, holding a large chunk of government bonds and stakes in blue chip companies such as lender Barclays Africa, grocer retailer Shoprite and Vodacom.
The PIC, which had assets under management of R2.1 trillion as at the end of March, manages funds on behalf of largely the GEPF. The other clients of the PIC are made up of the Unemployment Insurance Fund, Competition Commission Fund and various other clients with smaller portfolios. The amendment bill also envisions the PIC playing a more active role in transforming the economy.
The bill mandates the PIC to create and protect local jobs, assist in industrialising the economy and building the manufacturing sector, and boosting exports.
“The corporation may assist with financing the buying of property by the members of the GEPF,” reads the bill. Clause 4 amends section 10 of the act and requires an annual report reflecting all investments of deposits, whether listed or unlisted, to be submitted to the minister for tabling, and published.
The future of PIC’s chief executive, Dr Dan Matjila, has come under scrutiny since September last year over allegations he had funded a girlfriend’s business. Matjila and the woman in question have both denied being in a romantic relationship or being engaged in corruption.
The National Treasury and the PIC board have both backed Matjila against the allegations. George pledged Fedusa’s support for the under-fire Matjila.
“We have full confidence in Matjila and how the PIC has performed under his leadership. We are, however, worried that there seems to be a co-ordinated media effort to sway public opinion against him for nefarious reasons unknown to the public.” Cosatu was not immediately available for comment.