Holomisa told retired Judge Lex Mpati’s PIC commission of inquiry on Wednesday that transformation was not a good reason for losing pensioners’ money.
“It goes against any moral standard to continue writing off billions in the name of black economic empowerment (BEE),” Holomisa said. “BEE can be done on a commercial basis and the banks have been doing it for decades. PIC-funded BEE transactions - and other poorly structured unlisted investments - that are losing money are a sophisticated way of looting from the state.”
Holomisa said the government should establish a separate fund to effect BEE transactions rather than risking and depleting workers’ pension funds.
“Not ideal,” he said, “but at least that approach could force a certain level of transparency and scrutiny as to who gets allocated shares and repeat empowerment will be difficult to effect.”
Holomisa said another area of concern was whether PIC money should be used to fund persons or companies that wished to buy shares in companies without adequate structuring, similar to the commercial banks.
“Why do we have the same persons or companies being empowered continuously? Could it be that there is a cartel of PIC beneficiaries? A deep forensic investigation of these networks and possible links to PIC personnel and directors is recommended,” he said.
“Everything else could be secondary to what appears to be a sophisticated capture of the PIC involving advisers, BEE firms and asset managers. This could be the crux of PIC dealings and alleged corruption.”
Holomisa said there seemed to be a definite relationship between former PIC directors and employees and other companies, adding that a case in point was the relationships between Harith, Lebashe and the corporation.
The Lebashe Investment Group has, however, strongly refuted and expressed disappointment at these allegations, describing them as unfounded and reckless.
Lebashe said in a statement that its dealings with the PIC were above board and in line with the relevant corporate governance regulations.
“In the interest of transparency, we previously stated that we are willing to provide access to Holomisa or any other interested South African regarding our dealings with the PIC.”
Holomisa advised the commission to investigate unlisted transactions - below the R2 billion threshold where it is unnecessary to obtain full board permission to go ahead - effected by the PIC.
The commission resumes on Monday.