LETTER: Why does PIC not act against loss-making investments?

Rising losses on investments are increasingly registered by the Public Investment Corporation (PIC). Yet the PIC does not take legal action against relevant companies and investors, which raises the question: why? Who benefits from the losses?

The Steinhoff saga has realised losses of at least R28bn. Investment losses without legal consequences were registered, among others, in the retail sector (R25bn-R31bn), MTN Nigeria (R1.8bn), Smile Telecoms Holdings (R1.2bn), African Bank (R4bn), and the industrial sector’s Afrisam, Tongaat Hulett and PPC (R8bn). Major construction companies such as Aveng, Group 5 WHBO and Murray & Roberts were all guilty of price fixing (R5bn). The list goes on.

Investments in state-owned enterprises (SOEs) are also scary. It is unlikely that the PIC will recover its investment from Eskom and others due to the high debt burden of SOEs, especially Eskom. Investments in unlisted institutions such as Isibaya show losses of 43.4% but investment is still being increased.

The PIC’s main client is the Government Employees Pension Fund (GEPF). The funds of the GEPF comprise the majority of the more than R2-trillion managed by the PIC. What right-thinking business person would continue channelling his or her business through an investment broker such as the PIC? In fact, the government is to blame because it won’t allow the GEPF to move its investments to other brokers.

And so the PIC is allowed to continue playing Monopoly with hard-earned pension money, with zero accountability. It is inconceivable that the GEPF does not exercise more vigorous supervision over pension money in terms of its mandate. Government’s silence in this regard is significant in light of its plan to settle Eskom’s debt burden with pension money — an Eskom in which CEO André de Ruyter admits corruption is still rife.

Joe Kleinhans
Annlin

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