Demand for greater labour participation in PIC – PSA

Association has also requested more information on basis for forensic audit ordered by minister

PSA demands labour participation in PIC

23 October 2017

In pursuit of transparent management of public servants’ investments by the Public Investment Company (PIC), the PSA has written a letter to the Finance Minister, Malusi Gigaba, to request greater involvement of labour in the investment company.

The PSA also requested more information on the basis for an independent forensic audit ordered by the Minister. The Union demanded full disclosure of already-funded, non-listed companies and the freezing of funding for new investments of this nature. The PSA also demanded that 80% of the PIC’s Board must comprise of public servants and called for the removal of current Board members with conflicting interests.

“The basis for an independent forensic audit on all investment contracts by the PIC for the past two years is questionable. On-going speculation regarding attempts to capture the PIC to gain control over public servants’ pensions by individuals for their personal financial gain casts doubt regarding the motive for the audit. The PSA is concerned that the instruction might be yet another attempt to remove the PIC’s CEO, Dr Dan Matjila, based on unsubstantiated media reports about alleged improper funding. Forensic audits, as ordered by the Minister, come at great expense and should be conducted when there is substantial grounds and evidence of financial mismanagement. The PSA is not convinced that there is sufficient evidence to warrant such an audit. The PSA supports the current PIC structure but there must be a clear separation of power between the administration and the Board,” said PSA Deputy General Manager, Tahir Maepa.

The PSA also indicated to the Minister it requires full disclosure of non-listed companies that have already been granted funding by the PIC to enable the Government Employees Pension Fund (GEPF) to track portfolios. “It is vital that the report includes a list of politically-connected persons. The PSA wants the funding model for such companies to be restructured and until then, the PIC must freeze such funding. BEE companies, by nature, pose a risk as most do not have assets that can used as guarantees to repay loans,” said Mr Maepa.

The PSA further requested the Minister to amend the Memorandum of Incorporation to include GEPF representation on the Board and to fill three existing vacancies on the Board with labour representatives by the coming PIC AGM in November 2017. “Since more than 80% of PIC assets are from the GEPF, the PIC’s Board of Trustees should reflect this. The Minister should use his discretionary power to appoint Board members based on informed decisions guided by the investor profile.Should these requests not be acknowledged by the Minister, the PSA will have no alternative but to interdict proceedings of the PIC’s AGM to ensure the safeguarding of public servants’ pension investments,” said Mr Maepa.

The PSA, along with other trade unions, had the opportunity to get clarity on some of the issues related to PIC in Parliament on 17 October 2017. The PSA made a submission on matters the Union needs to be resolved and informed the Committee of consequences should the requests not be met or properly considered.

The PSA’s submission was supported by all political parties present at the Committee.

“The PSA is confident that a strong united approach by all stakeholders will ensure the proper management of public sector employees’ pension investments,” said Mr Maepa.

Issued by Pontsho Mohlala, Assistant Officer, Communication and Social Responsibility, 23 October 2017