Finance Minister Nhlanhla Nene has called for patience in waiting for the commission investigating state pension fund administrator – PIC to do its work.
This follows calls by UDM leader Bantu Holomisa that the PIC’s CEO Dan Matjila be suspended over corruption allegations.
Some senior PIC executives have been accused of receiving bribes to invest in the scandal hit VBS Bank. Minister Nene was speaking to the SABC on the sidelines of the BRICS summit in Sandton.
“There are two processes that we have announced to the PIC . the first process is the current issue at hand which is an internal process and the second one is not a commission of inquiry that is going to be taking ages and Its for that reason that I don’t think its going to be for the president a smaller commission that will focus specifically on governance issues within the organisation and on any other incidents that might have taken place to ckean the place up and restore it to its former glory.”
The independent inquiry into the affairs of the Public Investment Corporation is expected to help the investment corporation return to its primary function and restore confidence. That’s according to Vastact Portfolio Manager, Michael Treherne.
The inquiry set up by Finance minister, Nhlanhla Nene, comes hot on the heels of reports on corporate governance issues involving the PIC board and CEO Dan Matjila.
The PIC has been embroiled in a corporate governance scandal.
Its CEO is accused of abusing his position to financially benefit his alleged girlfriend which has led to, United Democratic Movement (UDM) leader, Bantu Holomisa calling for Matjila’s suspension pending a forensic investigation.
Portfolio manager Michael Treherne, says the PIC’s governance issues may have a negative impact on new investments.
He says it will bring into question whether the investment corporation is investing high yielding projects.
Treherne has added that Treasury’s inquiry into the affairs of the PIC will ensure that its management is sustainable.
“I think the existing funds you wouldn’t have to worry about and government wants to make sure that is done right. Part of the PIC’s money is UIF for example. So you want to make sure that unemployed people who are recieving UIF continue to receive their money. So you want solid leadership, at the moment you’ve got a split in the board due to allegations,none that have been proven yet. You’ve got people more focused on protecting themselves and trying to stave off allegations than running the organisation,” says Treherne.
Treherne says government pensioners will not suffer major losses due to this scandal. This as the investment corporation has diversified its investments.
However, Treherne has raised the alarm bells over rumours that the PIC might have to convert its loan to Eskom into ownership.
Especially after the power utility reported a R2.3 billion loss when it released its financial results.
“If I was a personal investor I wouldn’t be investing in Eskom and the potential to turn R300 billion, which is what roughly the PIC has lent Eskom. If they then take an equity stake, is it going to be worth it in the long run? Will they get dividend out of it? That remains to be seen. At the moment Eskom is in a very tough situation,” adds Treherne.
Meanwhile, Congress of SA Trade Unions (Cosatu) has welcomed the finance minister’s commitment to set up a commission of inquiry.
However, the labour federation says it will wait for the enquiry’s terms of reference before it comments. -Amina Accram and Tshepo Ikaneng
