Finance minister Nhlanhla Nene. REUTERS
Finance minister Nhlanhla Nene. REUTERS

No politician should chair the board of the Public Investment Corporation (PIC), the Public Servants Association (PSA) told parliament on Wednesday.

Such a move would ensure there was no political intervention in the affairs of the fund, PSA assistant GM of collective bargaining Leon Gilbert told parliament’s finance committee on the Public Investment Corporation Amendment Bill.

Currently, deputy finance minister Mondli Gungubele chairs the PIC and has played a direct role in the saga surrounding PIC CEO Dan Matjila and his alleged misuse of PIC funds.

The PIC Act says the finance minister must appoint the chair of the PIC board. Gilbert, however, said the chair of the PIC should be appointed from the board of directors. The bill provides that the finance minister, or if designated by him, the deputy minister, should chair the board. It also provides for trade union representation on the board.

The PIC manages about R2.2 trillion on behalf of the Government Employees Pension Fund (GEPF), the Unemployment Insurance Fund and the Compensation Fund.

The PSA represents more than 237,000 members employed in the public service.

To improve transparency, the bill will require the PIC to publish and submit a report to the minister on all its investments for tabling in parliament. Ministerial directives regarding the management of the PIC will also have to be made public.

The bill will also require the PIC to consider certain matters when exercising its powers, namely securing the financial sustainability and security of the fund and creating and protecting local jobs, among others.

Gilbert strongly opposed this provision, which would mean the proposed law would supersede the investment mandate depositors gave the PIC.

"There should be nothing in the statute which permits the PIC to ignore or overrule or depart from the investment objectives of its clients," he said. The PSA also objected to a clause that would allow the PIC to assist with financing the purchase of property by GEPF members, saying this should not be embodied in law.

He said the PSA fully supported housing assistance to PSA members through the GEPF but believed the provision was misplaced in the PIC bill.

Cosatu strongly supported the bill, especially the provision for two or three trade union representatives on the PIC board, entrenching the accountability and transparency of the PIC, and making the deputy minister or minister the chair of the board.

The amaBhungane Centre for Investigative Journalism’s Karabo Rajuili urged the public to participate in the appointment of the PIC board directors.