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Johannesburg – Finance Minister Malusi Gigaba may face court action from the Public Servants Association (PSA) if he does not agree to their demands to have better representation on the Public Investment Corporation’s (PIC) board.
This is according to the PSA’s spokesperson and deputy manager Tahir Maepa, who explained to Fin24 that three letters of demand had been written to the minister without response.
The letters were written on September 5, and October 12 and October 26. In these letters the PSA raises concerns over the composition of the PIC board, which it says contravenes the PIC Act of 2004.
The PIC board is appointed by the finance minister, CEO Dan Matjila explained at a briefing in October. The minister should have due regard for nominations submitted by depositors, which in the past was not always the case, he said.
“All we are saying is from where we are sitting, the board is wrongfully constituted. It does not comply with the Act,” said Maepa.
He told Fin24 that the majority (207 000) of the PSA’s members are also members of the Government Employee Pension Fund (GEPF). This is 12.9% of the GEPF’s 1.2 million active members and its 400 000 pensioners and beneficiaries. The PIC is the fund’s primary investment agency.
Maepa said that the PSA has a significant and direct interest on how the assets of the GEPF are invested and the governance structures of the PIC.
“The Act is clear [that] the depositors must be consulted when he [the finance minister] appoints the board members for the PIC … How can the minister not consider putting the people who have an interest to be part of the management of that board?”
“As minister he is not the alpha and omega and not above the law. The law dictates how things should be done. We do not care who he thinks he is, if he does not come back with assurances we are taking him to court,” he said.
Demands
Currently there are three vacancies on the PIC board. The PSA wants the minister to amend the memorandum of incorporation to include GEPF representation on the board and for the vacancies to be filled by labour representatives.
The PSA also demanded that 80% of the PIC’s board be made up of public servants. The PSA also wants board members with conflicting interests to be removed.
A full disclosure of non-listed companies that have been granted funding by the PIC should be provided, Maepa explained, to ensure that directors of these companies are not linked to politicians or people with vested interests.
The PSA also wants more clarity on the purpose of the independent forensic audit into the PIC. Maepa slammed the audit as “hogwash” and an attempt to get rid of Matjila. “He [Matjila] is seen as a deterrent to the schemes of the minister to get money from the PIC to bail out SOEs [state-owned enterprises].”
In October Gigaba ordered the audit into the PIC’s investments over the past two years in response to “public events” that had taken place. Gigaba did not explicitly say that these were related to allegations against Matjila.
In September Matjila had to explain himself to the PIC board after being accused of siphoning PIC funds to those connected to him. The board cleared him of all wrongdoing.
Maepa reiterated that Gigaba’s probe was an effort to get rid of “sound managers” at the PIC. This is to “bring their own people to have access to the PIC money”, he said.
Previously Matjila said that Treasury has no say in the investment mandate of its clients. He also said that although it may be possible for the corporate management of the PIC to be captured, it would be difficult to capture its clients and their mandates as there are a "fair amount" of checks and balances.
Treasury is yet to respond to Fin24's request for comment.
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