On the face of it, it would seem Patrick Dlamini’s return as CEO of the Public Investment Corp (PIC) last Thursday, after an icy spell in the wasteland of “precautionary suspension”, has calmed the bubbling tension at Africa’s largest pension fund.
Certainly finance minister Enoch Godongwana would want it this way.
That would be bad news — because then you can forget about the government doing the right thing for the 1.7-million civil servants whose pensions depend upon sage stewardship of the R3.72-trillion fund. The right thing, obviously, would be to trash the PIC Amendment Act it passed, as recently as 2021, mandating that a deputy minister chair the organisation.
In 2020, judge Lex Mpati recommended that the PIC chair be independent of political ties — but the ANC led the charge in parliament to codify precisely the opposite. Dlamini’s suspension, which left five of the top six executive positions vacant, was the perfect time to fix this.
But without the panic of gory headlines using the word “crisis”, the government tends to lapse back into the state it knows best: glorious inertia.
“The ANC is desperately hoping the media moment has passed, the fuss just all goes away, and everyone can get back to how it was before,” says Mark Burke, the DA’s representative in parliament’s standing committee on finance.
“But this crisis showed precisely why it’s so important that the PIC is depoliticised. We had politicians at each other’s throats, further destablising an already precarious organisation.”
The crisis was sparked by the PIC board’s decision to suspend Dlamini on July 13, based on a whistleblower report that accused him of undermining the board, and “relitigating” an arbitration case where the PIC ended up paying R411m to a shareholder of Lanseria Airport.
The fallout was dramatic: the board led by deputy finance minister David Masondo abruptly resigned, facing opposition from an evidently furious Godongwana, who didn’t believe Dlamini should have been put on ice.
Two weeks ago, Godongwana appointed a new board which, to nobody’s surprise, allowed Dlamini to “resume his duties as CEO” on Thursday, after the high court deemed his suspension “unlawful”. The board, now headed by deputy minister in the presidency Seiso Mohai, however, did say it will ensure the whistleblower claims are “investigated independently”.
Certainly, the footage of Dlamini climbing out of his car as he returned to work, with jubilant staff dancing, singing and holding up posters welcoming him back to the Menlyn Maine office, made for great PR.
But there are a number of pressing questions, not least of which is whether the damage done to the relationship between Masondo and Godongwana can be fixed.
Masondo has been wounded by the court judgment, which said the board “acted unilaterally, without ministerial approval, and in disregard for its own policies”. He told the FM that since his board had been dissolved, it couldn’t present its case to court. “As a result, the court ruled on the basis of only one version of events.”
Which brings us to the more important question: now that the veneer of calm has been restored, will the talk of changing the law to ensure the PIC is chaired by an independent businessperson, rather than a politician, fizzle out?
Burke isn’t hopeful. “Up to this point, the ANC has made every effort to ensure it doesn’t do what Mpati recommended,” he says. “Some people in that party don’t want anyone looking under the hood of the PIC, knowing what they’ve done, and what they intend to do.”
As it is, the PIC’s new chair, Mohai isn’t likely to expend much energy in changing the law. As Cosatu points out, Mohai played an “instrumental role” in ensuring parliament adopted that law in the first place “against massive covert and overt resistance from many vested and powerful state capture interests”.
That’s some whopper. A whole shedload of this “resistance”, after all, was because of Mpati’s entirely sane suggestion to “depoliticise” the PIC. Reframing this as somehow helping “state capture interests” is not only cynical, it is precisely the opposite.
But while Dlamini may be back in office, the stench over the Lanseria Airport deal lingers.
To recap, the PIC had lent R333.2m to a company called Acapulco back in 2013 so it could buy 25% of the airport — a loan it never repaid. In the end, after the PIC took over the Lanseria stake, a messy arbitration followed in which it was ordered to pay R411m to compensate Acapulco for its “sweat equity”, based on a suspect value of Lanseria that the PIC didn’t properly interrogate.
It was Dlamini who commissioned PwC to find out how his asset manager had “dropped the ball”. And it was Masondo who then referred that PwC report to the Special Investigating Unit (SIU) to find out whether there was any sinister reason why the PIC had messed up.
One insider is adamant there was skulduggery. “I can’t see a world in which the PIC would have made so many mistakes innocently. If it wasn’t deliberate, it was rank incompetence, so there must be accountability,” he told the FM.
The SIU has the power to subpoena bank accounts and dig far beneath the surface. And if they do find anything sinister in this R411m payout, you can expect the old issue of political interference will raise its head yet again.
