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PIC Commission of Inquiry Report Released

March 13, 2020

The Presidency

The report of the Judicial Commission of Inquiry into allegations of impropriety at the Public Investment Corporation (PIC) has been released.

According to a presidency statement, president Ramaphosa received the report in December 2019.

The Commission of Inquiry was set up in October 2018 headed by Justice Lex Mpati, the former President of the Supreme Court of Appeal, and assisted by Gill Marcus and Emmanuel Lediga.

Some of the issues the Commission had to enquire into, make findings, report on and make recommendations included whether any alleged impropriety regarding investment decisions by the PIC contravened any legislation, PIC policy or contractual obligations and resulted in undue benefit; whether any PIC director or employee used his or her position or privileges, or confidential information for personal gain or to improperly benefit another person; whether all the investigations into the leakage of information and the source of emails containing allegations against senior executives of the PIC were justified; whether the PIC has adequate measures in place to ensure that confidential information is not disclosed and, if not, to advise on measures that should be introduced; whether there are discriminatory practices with regard to remuneration and performance awards of PIC employees and whether, considering its findings, it is necessary to make changes to the PIC Act, the PIC Memorandum of Incorporation in terms of the Companies Act of 2008, and the investment decision-making framework of the PIC, as well as the delegation of authority for the framework (if any) and, if so, to advise on the possible changes.

In the statement, president Ramaphosa indicated that the Commission was set up as “all public institutions need to be held to the highest standards of integrity and accountability, and must effectively and efficiently fulfil their mandates”.

The president added that the “Commission makes recommendations which require urgent attention and action by different state institutions, including the criminal justice system, National Treasury and the reconstituted PIC Board”.

The report will be forwarded to the National Prosecuting Authority and all relevant regulatory authorities for consideration.

The presidency confirmed that, regarding implicated persons, any “follow-up investigations, based on the recommendations made, will follow due process and therefore give them further opportunity to be heard before any steps are taken against them”.

Recommendations include that certain steps be taken at the Government Employees Pension Fund (GEPF) to secure its own position such as a review of the role, relationships, nature and frequency of meetings between the GEPF and PIC; a forensic audit on some transactions be undertaken and, if necessary thereafter, refer the matter to regulatory and law enforcement agencies; strengthen the capacity and role of post investment monitoring and valuation; payments to be further investigated and any malfeasance that may have arisen to be penalized; a review of all advisor contracts over the past 5 years to be undertaken; PIC’s internal corporate governance must be urgently improved; the skills set of the PIC Board should ensure that Board members and senior management have the requisite knowledge of expertise in relevant fields; changes to laws governing the PIC, taking into account the PIC Amendment Bill of 2017 and the recommendations; far-reaching changes in the PIC’s operating model; whistle-blower policies need to be in line with the Protected Disclosure Act and the the Politically Exposed Person policy needs to be strengthened.

As regards governance, the operating model and PIC legislation, the presidency declared that treasury, the PIC and its board will ensure that all the required changes are effected in terms of legislation, the shareholder compact, MOI and corporate governance processes.

The PIC is also expected to take steps to recover all the monies utilised in irregular transactions or unlawfully paid out.

Treasury has also been tasked with drawing up a detailed plan of action for itself and the Board of the PIC, and monitoring implementation of the plan.

Treasury will report to the presidency on progress in implementation at regular intervals.