The Government Employees Pension Fund has requested a report from the PIC on a decision to purchase undeveloped farmland valued at R586m, members of Parliament heard.
On Wednesday the Government Employees Pension Fund principal executive officer Abel Sithole, its head of corporate services Musa Mabesa and its chairperson Dr Renosi Mokate briefed the standing committee on Finance on its 2018/19 financial report.
During a question and answer session with MPs, the officials were asked whether the GEPF had given the PIC approval to purchase the land. The PIC manages over R2trn in investments and the GEPF is its biggest client.
Earlier in February Business Insider reported that the PIC had purchased the undeveloped property in Klerksdorp, in the North West, on behalf of the GEPF.
Freedom Front Plus MP Wouter Wessels on Wednesday probed the GEPF on the investment decision. To this Mokate said that the PIC had been requested to provide a report on the matter. Once the GEPF analyses the report, it would be able to give a view on the matter.
Mokate stressed that the decision to purchase the land did not rest with the GEPF, but rather the PIC, which is mandated to invest on its behalf. "This is not something the GEPF would approve. It is part of the PIC investment process so the PIC through its various structures would approve that," Mokate said.
Commenting on the matter, Sithole said that the GEPF advances economic development, through the PIC. He said that it is not unusual to purchase land with the goal of future development.
"It is not unusual for the GEF, via the PIC, to look for areas of development, especially in areas we are not currently focused on," he said. It appears the land was bought for future development. But the details of the matter will be addressed once the PIC has been given the opportunity to analyse the relevant information.
According to Business Insider, the PIC bought 60% of the land and intends to build a new suburb in Klerksdorp. Another pension fund - the Municipal Councillors Pension Fund - however, had lost 35% of its investment in the property, Business Insider reported.