JOHANNESBURG - The Public Investment Corporation (PIC) has said it noted with concern the reports surrounding the pension fund bailing out the ailing state power utility, Eskom.
The PIC said in a statement that neither the PIC, as the asset manager, nor the clients have been consulted regarding the proposed Eskom funding solution.
The PIC went on to say in the statement, "PIC’s investment function is governed by specific terms included in each client’s investment mandate and designed to further each client’s investment goals. In discharging our fiduciary duty to our clients, the PIC must and assesses any investment proposal in line with client mandates. Every decision the PIC takes is based on the merits of each investment proposal and aims to generate risk-adjusted financial and social returns for our clients. Should the PIC receive a proposal to further invest in Eskom, the PIC will follow its governance process as outlined in the investment mandates to arrive at a decision."
The PIC said that it is well aware of the risk that Eskom poses to the South African economy and to the funds invested on behalf of its clients.
"We believe a long-lasting solution should address, amongst others, Eskom’s growing debt burden; impact of Eskom power generation business on the environment; governance reforms; operational effectiveness; improving procurement practices; and ensuring a reliable supply of power to the economy."
"The PIC is ready and keen to engage with various stakeholders to find a suitable and sustainable solution for the systemic risk posed by Eskom. Such a solution must be in line with prudent management of client assets. The PIC is obligated to always act in the best interests of its clients, whilst giving due regard to the national interest," the PIC said in a statement.
The PIC manages in excess of R2 trillion on behalf of clients that include the Government Employees Pension Fund (GEPF), Unemployment Insurance Fund (UIF), Compensation Commissioners’ Fund (CC) and several others.