CAPE TOWN – The Public Investment Corporation (PIC) has lifted assets under management by R47.9 billion to R2.13 trillion in the 2018/2019 financial year.
The PIC, the biggest asset manager in Africa, said yesterday that the growth was from an above-average portfolio performance underpinned by a sound investment strategy.
Some 86 percent of the PIC’s assets are managed on behalf of the Government Employee Pension Fund, 7.8 percent is for the Unemployment Insurance Fund, while 1.97 percent is on behalf of the Compensation Commissioner Pension Fund.
Chairperson Reuel Khoza said the PIC had suffered reputational damage through the year due to conduct and governance breaches that had involved the flouting of investment processes and abuses of positions of privilege.
Khoza said a number of actions had been taken to improve governance, following the appointment of a new board in July, and the Mpati Commission of Inquiry – established to probe governance failures at the PIC – still had to make its recommendations.
He said the PIC was aware that some of the findings might be damaging.
Actions taken to improve governance included the separation of the roles of chief executive and chief investment officer, and the additions of chief risk officer, chief technical officer and chief operations officer – all new positions that were deemed essential for an asset manager the size of the PIC, said Khoza.
In addition, the risk and the audit committee of the board had been split, whistle-blowing was being encouraged, while access to the PIC was being reviewed to eliminate “middlemen” in the investment process who charged exorbitant fees.
A key priority was also to fill vacant positions at the PIC, paying particular attention to the deficit of women employees, and a recruitment search for a chief executive had begun.
In addition, the board was addressing concerns raised in the auditor-general’s report, which had given the PIC an unqualified audit with findings that represented a regression from the previous year's unqualified audit.
Khoza said three PIC officials implicated had been suspended and were involved in disciplinary hearings,
In response to a question from a parliamentary committee about how the PIC responded to loans that had gone bad, such as a R1 billion loan to Sekunjalo Independent Media for media assets, PIC acting head: legal counsel Lindiwe Dlamini said they had sent a letter of demand and were considering liquidating the company.
Responding to this, Sekunjalo Investment Holdings chief executive Iqbal Survé said in a telephone interview on Tuesday that the Sekunjalo Independent Special Purpose Vehicle had responded to the PIC’s letter of demand to state that the PIC had no basis for its claims for reasons that were disclosed, and they were now awaiting a further response from the PIC.
Dlamini also said the PIC had suspended litigation against Steinhoff so that a mediation process could begin, but that the litigation would resume if the mediation “is not fruitful”.
On the VBS Mutual Bank collapse, she said the PIC had filed director delinquency actions against two directors, and were approaching professional bodies to have the directors disbarred. The PIC also held a creditor claim in the VBS liquidation process, she said.