Fedusa came close to telling the GEPF to fire the PIC, inquiry hears

Union federation Fedusa was on the brink of recommending that the Government Employees Pension Fund (GEPF) fire the Public Investment Corporation (PIC) as the guardian of public servants’ retirements savings.

This is the view of Matthew Parks, parliamentary co-ordinator for rival federation Cosatu, who appeared before the commission of inquiry into the governance and functioning of the PIC, being led by retired judge Lex Mpati on Tuesday.

Parks said that Fedusa was eager to pull the GEPF’s funds from the care of the PIC following the “explosion” of allegations regarding state capture at the state-owned asset manager.

“Workers no longer feel that their money is safe, so they were on the verge of pulling out,” says Parks.  

Public-sector workers’ unions wield enormous power at the PIC’s largest client, the GEPF, where they are entitled to appoint half of the representatives on the the fund’s board of trustees. 

The GEPF accounts for 88% of the R2-trillion the PIC manages. Any decision to withdraw a substantial portion of funds would be a death knell for the PIC. The irony is that Fedusa fired its long-serving general secretary Dennis George in May, due to him allegedly improperly benefiting from the listing of Iqbal Survé’s Ayo Technology Solutions.

George is appealing his dismissal.

Ayo has featured extensively at the inquiry following revelations the PIC allegedly undertook no due diligence on the investment before agreeing to pay R4.3bn for a 29% stake in the company at its listing in December 2017.

The PIC was the only investor to subscribe for shares at the listing.

Parks said Cosatu was equally frustrated with what transpired at the PIC and the manner in which it has engaged with them over their concerns. “It is playing fast and loose, treating billions [of rands] like Smarties. It’s difficult to answer the questions why the PIC has been allowed to run amok, because there is no accountability. It’s like the Wild West.” 

Parks said Cosatu was persuaded to continue working with the PIC for the time being, given that the federation is satisfied with the content of the PIC Amendment Bill currently awaiting the president’s signature. 

The bill would formalise the practice of appointing the deputy finance minister as chair of the PIC. It would also give unions the right to appoint three directors to the board. 

Cosatu was also pleased the president agreed to establish the commission of inquiry with a mandate to make wide-ranging recommendations on the issues and challenges facing the PIC.

Parks’s statement and answers before the commission gave the impression that Cosatu was isolated from the corridors of power, even though it is a member of the tripartite alliance, with the ANC and the SACP. 

thompsonw@businesslive.co.za