A commission of inquiry led by former president of the Supreme Court of Appeal judge Lex Mpati, into allegations of governance flaws and misuse of funds at the Public Investment Corporation (PIC), submitted its investigation report to President Cyril Ramaphosa in December 2019. 

The president appointed the commission in 2018, after allegations regarding investment decisions made by the senior management team of the PIC, the state-owned manager of more than R2-trillion in public sector assets, mostly on behalf of the Government Employees Pension Fund.

In his state of the nation address, Ramaphosa said he would make the report “available to the public together with a plan on taking the findings and recommendations forward in a few days”.

For most people, almost three weeks is a bit more than a “few days”. The void has been filled with speculation that inflicts even more damage on the stability and reputation of the PIC.

The investments in Steinhoff and Ayo are both deep under water, with the former having shed more than 95% of its value after the uncovering of accounting fraud that left it on the brink of collapse.

Earlier this week, the PIC said it had fired Fidelis Madavo, the manager of the listed equities division that ultimately oversaw the ill-fated R4.3bn investment in Iqbal Surve’s Ayo Technology Solutions, for “gross misconduct”.   

The Ayo transaction, along with a R9.35bn loan the PIC advanced former union leader Jayendra Naidoo’s company, Lancaster Group, to buy shares in retailer Steinhoff, are just two of the high-profile deals that warranted broader scrutiny. The PIC’s privately held investments under the fund’s R45bn Isibaya Fund have also sparked debate around transparency and performance.

The investments in Steinhoff and Ayo are both deep under water, with the former having shed more than 95% of its value after the uncovering of accounting fraud that left it on the brink of collapse. Ayo is down 95% since debuting on the JSE in December 2017. The PIC’s subscription for shares in the company gave it a valuation of about R15bn. As of Tuesday, it was worth just R688m.  

Former PIC CEO Dan Matjila has defended both transactions, saying the money pumped into Ayo could still be recovered as the tech outfit could embark on an acquisition drive that could lead to the resurgence of the share price.

As for advancing the loan to Naidoo, Matjila told the commission the thinking behind the deal was to give the PIC an ally or a “friendly” member on the board of Steinhoff, which only revealed huge holes in its accounts about a year after Naidoo bought the stake.

Also disturbingly, the commission, which wrapped up public hearings in August, after seven months and testimonies from 77 witnesses, heard from Matjila — a veteran of the company with 15 years’ experience — that he was subjected to immense pressure to use the fund’s money to bankroll business ventures of senior politicians, something he resisted. 

We hope Mpati, with the help of former Reserve Bank governor Gill Marcus and investment industry veteran Emmanuel Lediga, has gone through the extensive testimony with a fine tooth comb to separate fact from fiction, and the wheat from the chaff. We will not know which is which until Ramaphosa makes the report and its recommendations public.

Our primary concern is to work out if the fund is still capable of assessing, determining and considering investments that would generate optimal returns for public servants and boost economic growth.

The report should give a clear explanation of the processes behind some of the questionable investment decisions that weakened returns and undermined the stability of the biggest investor on the JSE.

Without it, South Africans cannot move on with confidence that the PIC is on course to restoring its image and refocusing its attention on delivering maximum returns for public servants and development outcomes for the broader society.

This is more crucial than ever, especially at a time when Cosatu and Ramaphosa are still talking up the possibility of using public and private pensions to prop up state-owned enterprises.

That’s a bad enough idea, made more so by the current trust deficit.