By Lehlohonolo Lehana.
The board of the Public Investment Corporation (PIC) has placed chief executive Patrick Dlamini and its chief investment officer, August van Heerden on precautionary suspension.
The decision follows weeks of internal strife, during which board chairperson and Deputy Finance Minister David Masondo and several other board members have been at odds with Dlamini.
An anonymous whistleblower report emerged in mid-June, accusing Dlamini of wrongdoing on several counts.
PIC said in a statement, that the suspension is intended to give Dlamini “sufficient space and time” to respond to the allegations.
“In line with applicable labour legislation and internal PIC policies, the precautionary suspension is intended to ensure a fair, objective and independent investigation into these allegations.”
The suspension “does not, in any way, constitute a finding nor is it a pronouncement of any wrongdoing on the part of the CEO, read the statement.”
The PIC manages the pension savings of 1.3 million civil servants and has endured serious governance breaches and financial losses due to investment decisions often linked to politically connected individuals.
It has invested about R67 billion in nearly 150 unlisted entities since its inception in 2005 and at least 78 of these have lost some or all of the money, according to parliament data. The fund manager has suffered significant losses with deals done around cement-maker AfriSam and chicken company Daybreak Farms, among many others, according to the data.
Finance Minister Enoch Godongwana and the board met over the latest bout of executive and political infighting.
Godongwana is said to have been at odds with Masondo, over the handling of a report commissioned by Dlamini and a subsequent whistleblower tip-off.
An investigation by PwC was ordered by Dlamini into valuations related to the Black economic empowerment deal linked to an investment in Lanseria airport outside Johannesburg. The report exposed alleged wrongdoing and named PIC staff. A whistleblower report later accused Dlamini of over-stepping his mandate and breaching governance limits by issuing the investigation.
The PIC’s governance problem deepened after Masondo announced that matters arising from the Acapulco investment transaction would be referred to the Special Investigating Unit (SIU), following a legal review of the recent PwC forensic investigation. The PIC said this decision reflected new information uncovered through the PwC investigation and subsequent legal assessment.
The PIC said the SIU referral would proceed separately from its investigation into matters arising from the whistleblower report. The whistleblower process would continue independently so that the PIC could address the entirety of the multiple matters contained in the report.
The latest battle follows the suspension of former chief investment officer Kabelo Rikhotso last year, along with unlisted portfolio head Thabiso Moshikara.
The story has been updated with PIC statement.