'Strange' that top PIC exec was suspended on eve of testimony - Fedusa’s Dennis George

The board of state asset manager the Public Investment Corporation should be disbanded, according to the general secretary of the Federation of Unions of South Africa Dennis George.

George spoke to Fin24 on Tuesday against the backdrop of the start of a commission of inquiry into the PIC, which started on Monday and is continuing on Wednesday. 

The PIC manages assets worth over R2trn on behalf of the large Government Employee Pension Fund, or GEPF, and four smaller state-run funds.

On Tuesday the commission heard that the PIC’s head of listed investments, Fidelis Madavo, had been suspended following a probe into the corporation's controversial R4.3bn investment in AYO Technology Solutions.

The group's share price has fallen by half since the investment was made. 

'Very strange' 

George stressed to Fin24 that while he is an independent member of the AYO board, he does not have the right to make statements on the company’s behalf.

However, he did comment on behalf of Fedusa and public service employees.

"From Fedusa’s side we find it very strange that Madavo was suspended on the eve that he was supposed to make a submission to the commission. The commission looks at more than the allegations against him."

George criticised the fact that government could have the deputy minister of finance appointed as the chair of the PIC. The corporation's board is appointed by the minister of finance in consultation with Cabinet.

"The fact that government can appoint a chair in the form of the deputy minister of finance amounts to meddling in the affairs of workers and their pensions. How the money gets invested must be a joint decision. The chair must be a neutral person," George said.

According to EWN, Deputy Finance Minister and PIC chair Mondli Gungubele has said the board is ready to appear before the commission and share the report that lead to Madavo's suspension.  

George said the PIC could be doing more through its investment portfolio to ensure that unemployment drops and black South Africans are included in the formal economy.

"We believe it is important that pension money from PIC must be used to give black people a voice and a place in the economy. We can’t have an economy completely controlled by white people. Companies deserve to get into the market," said George.

In a separate statement on Tuesday morning, the PIC said its preliminary report into the AYO investment "clearly reflects a blatant flouting of governance and approval processes of the PIC".

In addition to suspending Madavo, the board said it had suspended the group’s assistant portfolio manager Victor Seanie. It said that employees had been "implicated in these irregularities" around AYO, but did not provide further information.

AYO did not reply to a request for comment sent via its website on Tuesday. The group does not have an up-to-date contact number on its website.

An email to a PR agency that has previously sent out releases on behalf of AYO had also not been answered. 
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