Africa's largest asset manager is running on a skeleton board. In the space of a week, six non-executive directors resigned from the Public Investment Corporation, which manages more than R3.6 trillion, most of it the pensions of South African civil servants. That leaves just five of the eleven-member board still standing.
How the board emptied out
The exits came in two waves. Thabi Nkosi and Nosipho Balfour resigned first, on 15 July, two days after chief executive Patrick Dlamini was suspended. Then Dorothy Kobe, Lerato Makwetla, Lindy Bodewig and Mpumelelo Maseko followed on the Tuesday, a day after Finance Minister Enoch Godongwana sent notice of a meeting that threatened to dissolve the board. The implosion came less than a year after the board was appointed in September. According to one board member, the walkout leaves "none, not a single one, with investment experience left".
The fight behind the exits
Two disputes drove the collapse. One was a battle over the appointment of three new chief investment officers, which reopened a deeper question of who really controls the PIC. The other was the fallout from a R411 million settlement paid to a company called Acapulco, which by one account had itself owed the PIC around R600 million, in a dispute that traces back to a decade-old investment in Lanseria airport. The payment is now the subject of a forensic review by auditors PwC, and the chair referred it to the Special Investigating Unit. The tug-of-war pitted Godongwana against his own deputy, David Masondo, who chaired the board.
Masondo resigned on 23 July, saying he was stepping aside "in the interests of the Republic of South Africa" and the continued stability of the PIC. Godongwana accepted the resignation and said he would appoint an interim board to steady the institution.
The turmoil lands on a fund already under strain. Parliament was told last year that more than 40% of its unlisted portfolio was in distress, and a R2 billion stake in the property group GRIT has destroyed shareholder value. With the chief executive suspended and the Financial Sector Conduct Authority investigating, the interim board inherits a fund in crisis, and millions of pensioners watching to see who is left minding their money.
