House Chair, the ACDP shares deep concerns about the state of governance at the PIC (Public Investment Corporation), which invests a staggering R3.7 trillion in state pensions.
It has been in the news for all the wrong reasons, and this report exposes deep governance failures that directly threaten state pensions.
The ACDP welcomes the particular attention given in the report to oversight over unlisted investments, including the Daybreak Foods debacle, given that approximately R18.2 billion of pensioners’ funds were lost with unlisted investments.
But this is a small drop in the total that the PIC invests. There is much more at stake. It does not operate in a vacuum. It has enormous economic significance, and its reputation is hugely important to South Africa’s financial system and to the confidence of domestic and international investors. This resulted in the recent intervention by the Minister to stabilise the PIC.
Former PIC Board Chairperson, Dr Masondo, has warned us that South Africa cannot afford another cycle of state capture, particularly when it comes to the PIC. And we need to be alerted to this.
He says that it begins when informal influence becomes normal and politically connected individuals acquire privileged access.
It thrives, he says, when boards become reluctant to challenge powerful shareholders, when management appointments become instruments of influence, and those responsible for guarding an institution begin to fear the people seeking access to it.
He asks the questions: “Who controls the institution? Who controls the workers’ monies? And who guards the guards?”
The ACDP agrees. This report is a step in the right direction but far more needs to be done by Parliament to ensure the protection of workers’ pensions by effective oversight.
I thank you.
