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Finance minister Enoch Godongwana is expected to move swiftly to appoint a new chair for the Public Investment Corporation (PIC) after a string of resignations left the state asset manager’s board without a quorum and legally unable to take binding decisions. The board is due to meet on Monday.The meeting follows the resignation of chair David Masondo and five other nonexecutive directors, leaving the corporation with only five board members. The PIC manages about R3-trillion in assets on behalf of the Government Employees Pension Fund and other public sector clients.Business Day understands Godongwana is considering candidates from within government to lead the board, with officials from the presidency, the National Treasury and the department of trade, industry & competition among those being considered. Under the Public Investment Corporation Act, the finance minister designates the chair of the board, a role that has traditionally been filled by the deputy minister of finance or another deputy minister in government’s economic cluster.Deputy finance minister Ashor Sarupen, who has also been linked to the position, declined to comment on whether he would accept the appointment if approached.“I will leave that to the discretion of the finance minister to determine and take it from there,” Sarupen told Business Day. The PIC turmoil has triggered renewed calls for a governance overhaul at the fund manager. Last week, the DA introduced the Pension Protection Bill, which seeks to implement key recommendations of the 2020 Mpati commission by removing politicians from the board, requiring an independent panel to recommend nonexecutive directors, allowing the board to elect its own chair and limiting the finance minister’s role in appointments.While the appointment is a statutory power vested in the minister, the selection is expected to involve consultation in government because the role has traditionally been filled by a serving deputy minister.Read: EDITORIAL | Rethink how the PIC is governedBusiness Day has independently verified that the deputy minister of co-operative governance & traditional affairs, Seiso Mohai, has emerged as a possible contender to chair the board. Another name that has featured in discussions is the deputy minister in the department of trade, industry & competition, Zuko Godlimpi. The government, however, has yet to give any public indication as to who will be appointed.The immediate priority for Godongwana will be restoring the board’s quorum and stabilising governance at the PIC after the resignations created one of the most significant leadership crises at the institution since the Mpati commission of inquiry’s 2020 recommendations.The PIC has been under renewed scrutiny after allegations about governance and investment decisions. According to Business Day’s sister publication, the Business Times, Godongwana has decided against establishing another commission of inquiry for now, preferring that investigations by the Financial Sector Conduct Authority and the Special Investigating Unit run their course before a reconstituted board considers their findings.Parliament’s standing committee on public accounts chair, Songezo Zibi, said the latest developments should prompt broader questions about whether those entrusted with safeguarding public pension assets fulfilled their fiduciary responsibilities.“If they worked for a private company, they would be in prison for gross negligence,” Zibi said, referring to former Government Employees Pension Fund trustees who oversaw the fund while governance failures occurred at the PIC. If they worked for a private company, they would be in prison for gross negligence.— Songezo Zibi, Parliament’s standing committee on public accounts chairZibi said the corporation’s overriding responsibility is to protect and grow public servants’ retirement savings.“The primary role of the PIC … is to invest it prudently so that it can meet the defined benefits that it has to provide money for,” he said. “The PIC is flush with money, and it uses it in an ill-disciplined way,” Zibi said. Business Day also reliably understands that the National Treasury is seized with whether to push through legislation that will reform the PIC through appointing a board that will only play an accounting and oversight role, the appointment of a nonpolitical head as the chair, the creation of a credit risk committee that will approve recommendations of the investment committee and get the Government Pension Fund to play a more active role in holding the PIC to account. “If the government wants to, it can do this in the next six months,” a source privy to discussions within the National Treasury said. Another source in the presidency, who also declined to be named, said, “The finance minister is still not convinced, and it is an instruction that would have to come from the president.” A third source in the ANC’s economic transformation subcommittee said, “If Enoch appoints an interim chair, this is the direction PIC reform is moving.” Business Day
