Abel Sithole. Picture: FREDDY MAVUNDA
Abel Sithole. Picture: FREDDY MAVUNDA

The long road to recovery for the embattled state-owned asset manager took flight last week with the Public Investment Corporation’s (PIC’s) first permanent successor since Daniel Matjila rolling up his sleeves and sliding his shoes under the desk for the first time on Monday.       

The challenge facing new CEO Abel Sithole, who was formerly head of the PIC’s largest client, the Government Employees Pension Fund (GEPF), is a formidable one. Far from inheriting a clean break with the past — despite the departure of Matjila — much of Sithole’s time over the next few years is going to be taken up figuring out what happened over the preceding 10 years.

This is because the Mpati commission of inquiry’s report handed to the president at the end of 2019 went into excruciating detail on what needed to happen to restore the investment manager’s reputation. Across the nearly 1,000 pages of the report are found myriad recommendations to undertake further forensic investigations and pursue wrongdoing.

The company’s board has established a subcommittee comprising certain directors and other technical experts that will inform future developments on these matters. In the interim, Sithole has been greatly aided by finance minister Tito Mboweni’s decision to reappoint the board led by chair Reuel Khoza for at least another 15 months.

Besides the no-nonsense Khoza, Maria Ramos and Irene Charnley will help navigate the tricky waters ahead as the PIC considers litigation against its former CEO and tries to recover money from disastrous investments and loans extended to Iqbal Surve’s Independent Media and Jayendra Naidoo’s Lancaster Group.

If that isn’t enough, there is the uncomfortable issue of executives within the organisation who didn’t exactly cover themselves in glory, according to the commission’s findings.

The status of CFO Matshepo Moré, who was placed on “precautionary suspension” last year, remains uncertain, while the retention of senior executives such as human resources boss Chris Pholwane and impact investing head Roy Rajdhar asks questions about what, if any, disciplinary processes have been undertaken.   

Like the plague afflicting many government departments and state-owned entities in the afterglow of the Zuma administration, of the 10 members of Sithole’s executive committee excluding him, four are there in an acting capacity.

If the ship is to cruise full steam ahead, will Sithole really want hangers-on?

Why the minor point on acting executive heads matters is because anybody that understands the game in financial services, as Khoza and Sithole do, will know that the biggest challenge facing the revival of the organisation is convincing talented professionals that working at the PIC will be the golden harvest, not the graveyard, of their careers.

For the PIC’s leadership, that means eviscerating the perception of any risk of reputational damage to prospective employees because, without that, they simply will not come. Previously compromised executives may not cut the cake as far as convincing talented people to return is concerned.

As far as the optimal organisational structure goes, the company is yet to pronounce on what its preferred future operating model will comprise. But it has already opted to reinstate the role of chief investment officer (a role that Matjila controversially jointly occupied while CEO) by appointing Sholto Dolamo in an interim capacity.

Already the executive head of research and project development, Dolamo is a safe, competent pair of hands who was barely mentioned in the commission’s report.

It is high time the PIC gets its act together. Its largest client, the GEPF, which as a defined benefit fund has the SA taxpayer as its backstop, has experienced a decline in its funding levels over the last few years. Sub-optimal investment management on the part of the PIC has played a role. Time is of the essence now.

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.