Gigaba takes action to prevent politicising of PIC

Cape Town - Minister of Finance Malusi Gigaba is concerned about what he calls "the politicising of the Public Investment Corporation (PIC)".

And he is ready to take "bold action" in this regard, he said in a statement issued by National Treasury on Friday.

The PIC represents 230 000 SA state workers and manages about R1.86trn in assets.

Gigaba has written to the PIC CEO Daniel Matjila and the board, requesting a list of all its beneficiaries and the investments it has made. Gigaba intends to make this public.

He has also asked Matjila and the board to conduct a forensic investigation into any concerns of irregularities at the asset manager.

Gigaba expects the list to detail the directors and shareholders of those companies as he believes this will ensure transparency and further build confidence in the institution. The CEO and board has two weeks to respond to his request.

Powerful people

“We need to assure pension holders that those with political or economic power will not be allowed to unduly influence the PIC,” said Gigaba.

"It is in the best interest of pension holders and investors in the PIC, for us to ensure that the asset manager does not function in an opaque manner."

Gigaba emphasised that the PIC does not belong to "powerful people", and that its interest must be aligned to what is best for pension holders.

He has also noted calls by labour unions for a representative of labour on the PIC board. He is considering this request and will arrange a meeting with labour stakeholders to discuss this matter further.

As the mini budget approaches, Gigaba appeals for a focus on what he calls "the issues that matter", such as growing the economy and finding ways of ensuring inclusive growth.

In August South African Airways (SAA) indicated in its corporate plan that the PIC could be a source of funding. Business Day also claimed that Gigaba told executives of the Congress of SA Trade Unions (Cosatu) that he can’t guarantee that government won’t attempt to make use of funds held by the PIC to recapitalise struggling state-owned enterprises (SOEs) and fund other projects.

In September Bloomberg reported that National Treasury is pressuring the PIC to provide as much as R100bn to fund struggling SOEs, according to two people with knowledge of the situation.

This led to Cosatu threatening to replace the PIC with privately owned fund managers to oversee its members' pension funds.

The Economic Freedom Fighters (EFF), the Federation of Unions of SA (Fedusa) and the Public Servants Association (PSA) then called for vigilance to prevent workers' pension funds managed by the PIC from being used to bail out SOEs.

At a media briefing towards the end of September Gigaba gave the assurance that pensions managed by the PIC are safe and that the PIC was not approached by Treasury for R100bn to bail out SEOs. He said he has full faith in the PIC CEO and board.

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