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PIC pursuing those responsible for VBS fallout, awaiting Steinhoff outcomes

Dec 07 2018 12:26
Khulekani Magubane, Fin24

The Public Investment Corporation has told Parliament's Standing Committee on Public Accounts that it is pursuing those responsible for the losses it faced due to the fallout at VBS Mutual Bank.

On the impact of the VBS saga, the state asset manager told Scopa it would wait for the outcomes of a PricewaterhouseCoopers forensic investigation into the retailer before making a decision.

However, the PIC delegation told the committee it still saw value in Steinhoff's African assets.

VBS Mutual Bank is currently under curatorship following a scandal that saw municipalities unlawfully depositing their funds into the bank. Steinhoff's share price has plunged by over 95% since its former CEO Markus Jooste abruptly resigned a year ago amid an accounting scandal, erasing tens of billions of rands in shareholder value. 

PIC CEO Matshepo More told the committee that the asset manager, whose largest client is the Government Employee Pension Fund, had its reservations when the things it was told by VBS Mutual Bank representatives did not match up with the figures at their disposal.

"On one appearance VBS told us everything is good and it’s growing. They did come to us requesting funding, and that is when we saw that something in the numbers was not tying back and the stories were not making sense," said More.

More said the PIC, which manages assets worth more than 2trn on behalf of public servants, began to express its reservations when it saw curious balance fluctuations from VBS.

One day the mutual bank would have a R20m bank balance, only for it to drop to just R2m the next day, More said.

"We expressed that there was something we were uncomfortable with. We disciplined one member and another resigned before we could discipline them. One member has been debarred from practice and we will pursue criminal charges," More said.

Regarding Steinhoff, More said the PIC board was busy with the forensic investigation on what happened and, once this was finalised, the board could update the committee.

"We are part of a group action against Steinhoff to try to recover what was lost, because we believe there was manager misrepresentation.

"The legal department is handling that. We are waiting for the PWC report to establish what may have happened," said More.

She said the PIC board was "waiting for things to unfold as the true extent of the fallout is not known".

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steinhoff  |  pic  |  vbs mu­tual bank  |  parliament


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