GEPF trustees must dismiss PIC as investment manager and lodge claims for debt write-offs amounting to billions of rand

4 December 2020

The FF Plus was shocked to learn that the GEPF has had to write off bad debt for the umpteenth time because the Public Investment Corporation (PIC), acting on behalf of millions of civil servants and pensioners, awarded suspicious loans.

The GEPF's annual report indicates that billions of rand of bad loan debt was written off, some of which had been given to politically connected individuals, like Iqbal Surve. Thus, the FF Plus insists that the GEPF trustees must take action and terminate the mandate with the PIC and also take legal steps to recoup the losses from the PIC.

This debt write-off is not the first resulting from the poor judgement of the PIC, which seems very keen to hand out suspicious investments and loans to political allies of the ANC.

In this case, R3,36 billion of the Lancaster Group was written off. That brings the total write-off to R9 billion for a loan amount of R12,9 billion. In effect, three quarters of the loan to the Lancaster Group has simply been written off. The head of the group, Jayendra Naidoo, apparently also has political ties with the ANC.

The other debt write-offs include R112 million of Iqbal Surve's Independent Group and even R48,5 million of VBS Mutual Bank. A truly strange write-off is the R2,3 billion for Belelani Capital, which occurred within a period of just 12 months after a loan of R5,8 billion was awarded. In this case, almost 50% of the loan was written off.

It is abundantly clear that the GEPF cannot rely on the PIC for sound judgement because GEPF members' pension funds are being recklessly squandered on the business ventures of ANC allies who have no business sense.

The GEPF's intention to intensify its oversight of the PIC is not enough to prove that the trustees are fulfilling their fiduciary duties.

At this stage, the trustees would actually breach their fiduciary duties if they do not sever all ties with the PIC and recoup the losses from the PIC.

Issued by Anton Alberts, FF Plus national chairperson, 4 December 2020