PIC board working with Hawks to prosecute those implicated in Mpati report | Fin24
 
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PIC board working with Hawks to prosecute those implicated in Mpati report

Mar 20 2020 15:45

The Public Investment Corporation's board is working with the National Prosecuting Authority and the Hawks to ensure those implicated in the Mpati Commission's report are prosecuted, and that monies are recovered.

The board's statement comes just over a week after the Presidency finally released the 955-page report on the commission's findings, which made damning allegations against officials of the state asset manager, including former CEO Dan Matjila.

President Cyril Ramaphosa appointed the commission, led by Justice Lex Mpati, in October 2018, to investigate allegations of irregularities in investments by the PIC, which managers over R2 trillion in state funds. The biggest client of the PIC is the Government Employees Pension Fund.

The PIC board met on Thursday to discuss the report's findings. "The board is in the process of developing and finalising a plan to implement the recommendations of the Mpati Commission, which will include instituting disciplinary action against all those implicated in the report.

"The board will also liaise with the law enforcement authorities, including the National Prosecuting Authority and the Hawks to ensure that all implicated parties are prosecuted, and lost monies are recovered," said PIC board chairperson Reuel Khoza.

The board is also addressing "corporate governance lapses" revealed by the commission to have led to a number of investments or transactions being funded without following due processes.

"The measures already underway include internal disciplinary action that has led to the dismissal of implicated staff and the legal action that is already under way pertaining to transactions such as the Ayo, Steinhoff, VBS and others.

"These proceedings are aimed at recovering monies that have been lost by the PIC and civil proceedings will also be instituted against the directors of affected companies," Khoza said.

The board will also appoint external legal and forensic experts to hold parties accountable. "In the interest of transparency, the details of the teams to be established will be published in due course to keep our staff, clients and the public informed," Khoza said.

According to the board, the inquiry and the report have had a significant impact on the morale of the PIC's staff. Going forward, regular staff meetings will be held to keep staff informed. A change management process will also be implemented in the next few weeks to give the staff an "opportunity" to build a culture of transparency and ethical behaviour in the organisation, Khoza said.

Khoza said that an announcement of a new CEO will be made soon, and other critical posts will also be filled urgently to stabilise leadership at the organisation. So far, to strengthen corporate governance, the  functions of the Chief Executive Officer and the Chief Information Officer have been separated, new posts for the Chief Risk Officer, Chief Technology Officer and Chief Operating Officer have been created.

Fund investment panels have been done away with, and all investment decisions are to be made by the investment committee. "The risk and audit committees have been separated and will be chaired by different board members," Khoza added.

Roadshow ahead

The board will also embark on a roadshow to meet key stakeholders, this includes staff, clients, key asset managers to get feedback on the measures the PIC is taking to implement recommendations on the Mpati report, said Khoza.

"We share the country's concerns that things went off track in the PIC over the past few years but we want to give the assurance that the board is doing everything in its power to address the systemic causes of the problems that have been uncovered, whilst being fully conscious of the fact that this will not be an overnight project," said Khoza.

"We will give regular progress reports to ensure that everyone is informed about the progress we are making in strengthening corporate governance procedures, systems and in implementing the recommendations of the Mpati Commission," he said.

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