Those who spent the heady days of 2019 watching witnesses being grilled at the commission of inquiry into the disaster at South Africa’s largest fund, the Public Investment Corporation (PIC), will remember Jannie Lubbe.
A skilled advocate of nearly 50 years’ standing, a former acting judge and chair of the bar council, Lubbe was the chief evidence leader of the commission headed by the equally formidable retired judge Lex Mpati.
His work shaped Mpati’s final report, which everyone hoped would put the PIC on a path to sobriety where it could properly invest the pensions of 1.2-million civil servants rather than pander to the friends of whichever politician came knocking.
”I trust that the implementation of [Mpati’s recommendations] shall put the PIC in a much stronger position to face the future and be an institution we can all be proud of,” President Cyril Ramaphosa said in 2020.
If only. Today, Lubbe is sanguine about the missed opportunity to fix the PIC, which is crashing through another crisis of shoddy governance, a factionalised board and a slew of empty chairs where there should be experts.
What happened is that on July 13 the PIC board, chaired by deputy finance minister David Masondo, suspended CEO Patrick Dlamini over a whistleblower report. This provoked the ire of finance minister Enoch Godongwana, who supported Dlamini and clashed with his deputy about it. Long story short, amid much acrimony, Masondo and the whole board quit last Thursday.
“If the recommendations of judge Mpati and the commissioners had been implemented, we wouldn’t have seen this circus,” Lubbe tells the FM. “There will always be questions about the investments at an organisation of that size, but that’s why you need a strong, competent board which can deal decisively with these issues and be above reproach.”
This, in the end, all comes down to political will — or rather, the lack of it.
Mpati’s report provided 308 recommendations, of which all have been implemented. Or as René Goscinny and Albert Uderzo, the creators of Asterix, might have said: well, not quite all. There was one specific recommendation that wasn’t — that the PIC be chaired by someone who isn’t a politician.
What it needed, Mpati said, was “an independent PIC board chairman with a significant background and demonstrable track record in investments or business”, not a political deployee.
This, Lubbe says, is the one change that could have made a difference. Only, the ANC-led government of the time just wasn’t prepared to give up this seat at the head of the table of the largest piggy bank around.
Instead, it did the opposite. In 2021, it passed the PIC Amendment Act, which codified that the finance minister “designate the deputy minister of finance, or any deputy minister in the economic cluster, in consultation with cabinet, to be the chairperson of the board”.
The threat of political intervention is all very academic — until it’s not, as the impasse at the PIC shows.
Usually, you might imagine that reports of political tensions between Masondo and Godongwana have been over-egged by an excitable media. But insiders say it’s probably even worse than what has been revealed.
Officials at both the PIC and the National Treasury privately told the FM in the past week that things got so bad that Masondo, along with the PIC board, had spoken to lawyers about potentially suing Godongwana to halt the organisation’s AGM, at which a new board was going to be elected.
“This is all about who sits where ahead of the 2029 election and who can access the PIC’s money,” said one well-placed person.
The upshot is a very public train wreck. With the board dissolved, Dlamini went to court this week to have his suspension declared unlawful on the basis that the board messed up in suspending him without Godongwana’s approval.
In his 55-page affidavit, Dlamini took aim at how the board “treated unverified allegations from anonymous sources as though they were established facts”. The implication is that they suspended him for political reasons, based on “speculation and the say-so of an unidentified and unidentifiable [group]”.
The whistleblowers, though, claim Dlamini has been trying to grab power for himself, failed to disclose conflicts of interest and ignored the board.
In their complaint, the whistleblowers say this case is vital, given how the Mpati commission was a “national reckoning” that shouldn’t be forgotten.
“It cost the PIC years of institutional credibility, attracted sustained public scrutiny and left the pensioners it is mandated to protect questioning whether their savings were safe,” they said.
It remains to be seen which way the investigation into the allegations falls: in favour of Dlamini or the whistleblowers.
But there is one contention the whistleblowers make that is entirely true: the PIC “cannot be permitted to become an instrument, a prize, a piggy bank or a casualty of political contest”.
This imperative is hard to overstate. Beyond just the R3.7-trillion managed on behalf of 1.2-million people, and the fact that the PIC controls nearly 20% of the JSE’s equity, it is the largest investor around. As such, its relative strength is the canary in the coal mine for foreign investors.
The quickest way to fortify the institution is to learn these lessons and remove all scent of political interference. But this will require the sort of political will the ANC has conspicuously failed to show until now.
Can it bear to do the right thing this time?