JOHANNESBURG — The Public Investment Corporation (PIC) crisis has intensified as six directors resign from the board within a single week, prompting Finance Minister Enoch Godongwana to call a general meeting for July 27 to address the escalating governance turmoil at South Africa’s largest asset manager.
The upcoming meeting is expected to vote on the removal of nine non-executive directors of the PIC Board, a group that includes Deputy Finance Minister David Masondo. This decisive action follows a chaotic period for the institution, marked by the precautionary suspension of Chief Executive Patrick Dlamini earlier this month and the subsequent resignation of two non-executive board directors, including Thabi Nkosi, former Chairperson of the Land Bank. With four of the nine targeted non-executive directors having resigned just yesterday, the leadership exodus has accelerated dramatically.
The stakes for the South African economy are exceptionally high. The Public Investment Corporation manages approximately R3.7 trillion in assets. Around 87% of these invested funds belong to the Government Employees Pension Fund (GEPF), while the remainder comprises critical public sector funds, including the Unemployment Insurance Fund (UIF) and other social security portfolios. While the PIC’s funds under management have continued to grow and government employees benefit from a defined benefit retirement scheme, experts warn that any massive losses stemming from governance lapses will ultimately force taxpayers to fill the financial gaps.
For years, the asset manager has faced persistent allegations of poor governance, with stakeholders raising concerns that the funds are being treated as a personal slush fund. Hard evidence has previously pointed to disastrous investment decisions resulting in billions of rands in losses.
In response to the ongoing turmoil, trade union federations are demanding stricter accountability. Matthew Parks, Parliament Coordinator for COSATU, stated that key officials at the PIC should undergo lifestyle audits. While Parks acknowledged that the asset manager has shown some improvement following the recommendations of the 2020 Impi Commission, he emphasized the importance of the 2019 amendments to the PIC Act, which COSATU heavily advocated for.
“The previous PIC Act gave the Minister of Finance a blank check that no longer exists,” Parks explained. “It allowed the minister to decide whomever he wanted to appoint to the board. That no longer exists. They must meet certain skills. There is now worker representation on the PIC chosen by workers to ensure that workers’ monies are safe, alongside a very clear investment mandate.” Parks condemned past investment decisions that lacked economic logic, describing them as “naked looting,” and stressed that current mandates must support local jobs, economic growth, sustainable development, and reliable returns on investment.
Financial experts echo the need for continued vigilance. Owen Nkomo, Founder and Managing Director of the Inkunzi Wealth Group, agreed that the PIC has tightened its approval processes for investing, particularly in unlisted businesses. This specific terrain is historically more susceptible to corruption due to its lack of transparency compared to publicly listed shares and bonds. While Nkomo noted that the Impi Commission was effective to a degree in bringing flouted rules to light, he warned that legacy transactions still require cleanup. He cautioned that some decision-makers remain negatively influenced by “tenderpreneurs” and political pressures, failing to appreciate who the funds are ultimately being invested for.
Corporate governance experts argue that structural changes are non-negotiable. Professor Alex van der Heever of the Wits School of Governance highlighted that the PIC remains opaque in its dealings, leaving the public to learn of operational failures only after immense damage has been done and with zero accountability.
Van der Heever pointed out that the Impi Commission’s recommendation—that a Deputy Finance Minister should not chair the PIC—was ignored. He argued that there should not be even a “whiff” of any politician chairing the asset manager, regardless of political affiliation.
“The corporate governance design of the PIC needs to change,” Professor van der Heever asserted. “Assets must be managed in an objective manner. The selection process for people who go on the board needs to have a multi-key selection process. This means the nomination, appointment, and removal process is entirely independent of the executive or government, much like a safe that requires more than one key as an additional protection.”
As the July 27 general meeting approaches, the pressure is mounting on the Public Investment Corporation to implement transparent, independent, and robust governance reforms. The long-term health of the institution remains absolutely critical to the financial stability of South Africa as a whole.
