The boss of South Africa's biggest money manager has been ordered reinstated after a court threw out his suspension. Patrick Dlamini, CEO of the Public Investment Corporation, won a High Court ruling in Pretoria on Tuesday that set aside his mid-July suspension and ordered his reinstatement. The PIC manages about 3.5 trillion rand, mostly government workers' pensions, and had been engulfed in what the court itself described as a turf war. Its stakes run through much of the JSE, from Naspers and MTN to Absa, FirstRand, Capitec and Standard Bank, so who runs it matters well beyond head office.
What the judge found
The ruling turned on who is allowed to remove the CEO. Judge Nathan Mbongwe found the suspension breached the PIC Act, which says the finance minister appoints the chief executive in consultation with the cabinet, leaving the board only to recommend a candidate. Suspending the CEO, the judgment reads, needed a recommendation from the board's remuneration committee, sign-off from the chairperson and the minister's approval. "None of these prerequisites were met. The board acted unlawfully, without ministerial approval, and in disregard of its own policies."
The mess behind the suspension
Dlamini was removed just over a year into the job, following a whistle-blower report about a deal in which the PIC paid 430 million rand to a firm called Acapulco. Acapulco had taken a 333.2-million-rand PIC loan back in 2013 to buy a stake in Lanseria airport, then defaulted as the debt ballooned to around 600 million rand. A PwC investigation Dlamini himself commissioned found the PIC had put up a weak defence at arbitration, to Acapulco's ultimate benefit. The fallout was bruising: a board exodus, the resignation of chair David Masondo after he clashed with Finance Minister Enoch Godongwana, and the appointment of Seiso Mohai as the new chair. Masondo, the deputy finance minister, had chaired that previous board and resigned under pressure from the minister. The market regulator, the FSCA, is still investigating.
The court has settled who runs the PIC for now. What it hasn't settled is the Acapulco deal at the centre of it, and that investigation is still live.
